Federal law makes it a crime not to file your federal income tax returns.
There are many reasons people fail to file their returns. Some may not realize they are required to file. Other may feel as though they cannot afford to pay, so they should file. This is a mistake. The failure to pay your taxes is not necessarily a crime, but the failure to file a tax return is. Don’t turn a simple debt collection issue into a criminal case. Once all returns are filed it is often possible to work out a payment plan that doesn’t leave you scraping to get by, but the IRS won’t even talk about payment plans or offers in compromise unless all returns are filed.
Others might feel as though they can’t file because they lost their records. But even if you lost your records or failed to hold onto your receipts, that is not an excuse for failing to file a return. Often, the IRS has much of the missing data (such as W-2 forms from your employer) you need to be able to file your tax return already in its system. But even if your information is not readily accessible, the IRS has special rules that allow a taxpayer to come forward and file an estimated tax return that serves as a good faith estimate of his income and expenses during the tax year. While the odds of a criminal prosecution for unfiled tax returns is very small, the best way to reduce that risk is to promptly file all missing returns.
If you have two or more years of unfiled tax returns and you need help, contact us online or call us at 401-324-9344 to make an appointment.