Monday, March 9, 2009

Do you have a habit of not filing your returns?

Have you filed your tax return yet? You have until April 15 2009 to do so? If you have experienced delinquent unfiled returns in the past, then you may or may not know the types of penalties you will incure if you negate to stay in compliance.

I think its safe to say that once you start getting in the habit of forgetting to file your returns, you continue to do so. This will bring upon a failure to file penalty and if you owe tax, a failure to pay penalty. According to the IRS, the failure to file penalty for 2008 has increased to the following :

"If you do not file your return by the due date (including extensions) you may have to pay a failure-to-file penalty. For income tax returns required to be filed after 2008, the failure-to-file penalty for returns filed more than 60 days after the due date (including extensions) is increased. In this situation, the minimum penalty is the smaller of $135 or 100% of the unpaid tax."

Any person who willfully attempts to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof:
*Shall be imprisoned not more than 5 years
*Or fined not more than $250,000 for individuals ($500,000 for corporations)
*Or both, together with the costs of prosecution

If you neglect to pay the tax owed, then daily interest will accrue daily:

The IRS changes the interest rate it charges each quarter. The rate is determined by taking the federal standard rate plus 3%. Currently for the first quarter of 2009, the rate is 5%. The IRS interest rate has ranged from 5% to 9% in the past 6 years. The amount of interest is computed based on the rate applied in each quarter to the amount owed.

Don't wait, contact a tax professional that can help you with your returns and your tax debt today.

1 comment:

footbolito17 said...

To add up, PENALTIES with regards to not filing income tax returns are very serious... better not take it for granted..

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