What happens if you forget to file taxes?

Question

Allright, I'm guilty of this. I filed an extension in April and pre-paid the amount that I thought would be due. After that we moved and got really busy and I totally forgot about the Oct. 15 deadline to file my taxes. Now I'm afraid to even look at how I'm going to be penalized for this. Anyone know what the penalties are? I think I've already paid all the taxes I owe, but haven't filed a return.

Answer 1

in 2005 i filed my 2002 taxes. i forgot to do them. they owed me $55.00 dollars i talked to the IRS on the phone they sent me the proper forms. not a problem.

Answer 2

It usually takes the IRS into the next tax year to figure out something is wrong with the return or that you haven't filed. This is particularly true if they've received W-2's or 1099's in your name. Usually they will send you a notice and based on the information they get, will compute an estimated tax due. This almost never includes any deductions you are entitled to (i.e. Sch A or business expenses to offset business income, etc.).

The first thing you should do is to file your tax return as soon as possible, because if you still owe taxes, you are now subject to interest and underpayment penalties, as well as a late filing penalty. If it turns out you owe nothing more, you will get your refund if any, and there is not penalty and interest calculations. Plus, there is a 3 yr statute of limitations on your ability to claim deductions or refunds.

If you get a notice from the IRS, dont panic! That is the first thing many do. Read it over carefully, prepare your return as you would have, and if you disagree then say so!

Answer 3

If you truly know you didn't file, file. If you are not sure, call the IRS. If you are getting a refund, no big deal as you only owe penalties and interest if you owe. (The absolute deadline for getting a refund on 2006 taxes is to file by 4/15/2010 or 10/15/2010 if you had an extension.)

Answer 4

If all of your taxes were paid by the due date, there shouldn't be any penalties.

Without getting that return filed, however, the IRS does not know that all of your taxes are paid, because the return tells them what you owe. If you do not file, they could make up an estimate of your taxable income that might be in excess of your actual income and they could assess you for taxes you don't owe.

If you do still owe them something, you will be assessed penalties and interest for late filing and late payment based on the balance that is paid late.

Answer 5

The penalty and interest for late filing can be as high as 50% of the tax due. So, if you turn out to be correct and you have paid in enough then there is no penalty or interest. If they owe you money you need to get the return filed to get your refund or have it applied to your 2006 tax account.

Answer 6

You have to be careful about IRS Penalties and Interest when you miss paying your taxes. Here is a brief explanation of some of the consequences that I found:

IRS Penalties and Interest for Late Tax Payments

There are very specific penalties and interest that the IRS charges for late or non-payments of income tax owed. The IRS also is very diligent about charging the penalties and interest and is usually timely in sending notices after the review of the tax return.

April 15th is the deadline for most people to file their individual income tax return and pay any tax owed. If you have not paid the tax in full and if there is any money owed, you will be sent a bill. Generally, interest is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined every three months and is the federal short–term rate (currently 7%) plus 3 percent. Interest is compounded daily.

If you file on time but don't pay all amounts due on time, you'll generally have to pay a late payment penalty of one–half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is applied. Further, the one–half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals, who file by the return due date, the one-half of one percent rate decreases to one-quarter percent for any month in which an installment agreement is in effect.

If you owe tax and don't file on time, the total late–filing penalty is usually four and one-half percent of the tax owed for each month, or part of a month, that your return is late up to five months. If your return is over 60 days late, the minimum penalty for late filing is the smaller of $100 or 100 percent of the tax owed.

You must file your return and pay your tax by the due date to avoid interest and penalty charges. For individuals, the due date is April 15 th of each year unless that date falls on a weekend. In that case, the due date is the first Monday after the 15 th.

Answer 7

Jolene B may be right, but do not follow her advice, the penalties and fees add up really fast. If you do not owe additional taxes, you will be ok, go ahead and file. If you do owe, you will be slapped with fees according to what you owe. The quicker you file, the better off you are.

Answer 8

The only time they come after you is if you owe thousands of dollars. If you owe very small amount or if they owe you money, don't worry about it, just send in your forms and forget about it.

Answer 9

If they owe you money, nothing happens. But if you owe them, then they can throw you in prison for tax evasion like they did to Al Capone.

Answer 10

The government will eventually remember to straighten it all out with you anyway---and they'll be in touch---might not be the same deal you could find if you go ahead and step up and do what you have to to straighten all this out right now----but they'll remember --- eventually ---and when they get in touch about it all--they'll have it all worked out already how it will be !!!!