Did you pay your taxes this year? You can run, but you can’t hide from the IRS! However, there is hope for struggling taxpayers to resolve back taxes and avoid IRS penalties!

For the millions of Americans who failed to file legally required tax returns, there’s still hope for receiving income tax relief! Even taxpayers who received an extension for filing are not granted more time for the payment of taxes owed and may need income tax relief.

The act of not filing your tax returns can lead to more significant financial problems in the long run. Not to mention, failure to file tax returns may be construed as a criminal act by the IRS, punishable by one year in jail and $10,000 for each year not filed. Needless to say, it’s one thing to owe the IRS money, but another thing to potentially lose your freedom for failure to file a tax return.

The longer you put off dealing with overdue taxes, the more serious your IRS problems will be. So I recommend filing any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as a levy on your bank account.

With the federal budget deficit for the current year expected to top $1.8 trillion, Americans can expect more tax audits and increased IRS actions. So anyone who owes back taxes will want to avoid becoming targets of aggressive IRS collection efforts that can financially cripple them for life.

Here are 5 reasons to file your delinquent tax returns:

1) You can go to jail for not filing your taxes
Even if you haven’t filed your tax return for one year - it is still considered delinquent and could be construed by the IRS as a criminal offense. Actor Wesley Snipes didn’t report more than $10 million to the IRS and he was convicted of three misdemeanor counts of failing to file a tax return. Richard Hatch, who won the first season of CBS’s hit show Survivor, is in prison for failing to report $1 million in prize money.

The IRS goes after those U.S. taxpayers who try to avoid taxes, and Average Joes as are just as likely as high-profile individuals to be targets of the tax-collecting agency. At every level, the agency has become increasingly aggressive in pursuing tax cheats. Are you willing to lose your freedom because you failed to file your tax returns?

2) You can incur a 25% penalty for not filing your tax returns
In this economic downturn, Americans may opt to not file because they don’t have the funds to pay the taxes owed. The best thing for taxpayers in difficult financial situations to do is file their tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.

Additionally, if there are any delinquent tax returns that are due, they should consider filing these returns as soon as possible to avoid the wrath of any potential IRS action, such as a levy on their bank accounts.

3) You can incur additional penalties for not paying your taxes
If you fail to pay your taxes due, you will incur additional penalties for failure to pay. Taxpayers who request an extension of time to file should keep in mind that this it is not an extension of time to pay. To avoid additional penalties, taxpayers should file by the deadline and pay as much as they can, even if they are unable to pay the entire amount due. You will still have a failure to pay penalty, but it’s much less. Then you can work with a specialized tax resolution expert to help you negotiate a tax settlement.

4) You can be subject to an increased tax bill if the IRS prepares your taxes for you
The IRS may prepare a “Substitute For Return” for delinquent taxpayers, in which they won’t be able to file for all of their personal exceptions or allowable deductions.  Because these returns are filed in the best interest of the government, the only deductions they’ll usually see are the standard deduction and one personal exemption, subjecting them to a larger tax liability. So it’s important for individuals to file their 2008 tax return as well as any prior delinquent tax returns as soon as possible to save money and avoid significant long-term consequences.

5) You must have all prior tax returns filed to be eligible for income tax relief
All back tax returns must be filed before the IRS will even entertain any type of tax settlement like an offer in compromise or a monthly IRS payment plan arrangement. The good news is the sooner you take care of your delinquent taxes, the less penalties and interest you’ll owe.

I believe there’s a solution to every problem… It’s never too late for to resolve your tax debt and avoid IRS penalties.

** If you have unfiled tax returns or other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-IRS-PROBLEMS.

More Tax Help, IRS News and Tax Relief Tips:

1. Options for Business Owners Struggling to Meet the April 15 Tax Deadline
2. There’s Still Hope if You Didn’t File Your Taxes: You Can Still Get Income Tax Relief and Avoid IRS Penalties
3. We’ve Expanded to Help More Taxpayers Resolve Their IRS Tax Problems!
4. KLOS Tax Tip #44: Individuals Get a Tax Break - But Get Tax Help if You Owe Back Taxes!
5. General Motors Pending Bankruptcy - Tax Help Available for GM and Chrysler Employees with IRS Debt

Tags: bank levy, delinquent tax returns, failure to file federal tax return, failure to file penalty, failure to pay penalty, income tax relief, IRS payment plan, IRS penalties, Michael Rozbruch, Offer in Compromise, Richard Hatch, substitute for return, tax advice, tax attorney, tax expert, tax help, tax resolution, tax resolution expert, tax resolution services, tax settlement, Tax Tips, unfiled tax returns, wesley snipes

This entry was posted on Monday, April 20th, 2009 at 1:30 pm and is filed under Tax Resolution Options and Alternatives, Tax news and tips, Working with the IRS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.