Failure to file your legally required tax returns can cause you to incur significant penalties and may be construed as a criminal (misdemeanor and potentially a felony!) act by the IRS. However, there are circumstances where an individual may have “reasonable cause” for not filing or paying taxes due (divorce, job loss, death in the family, illness, etc).

The law allows for the abatement of penalties for reasonable cause, which is very subjective, and penalties will be imposed for failure to establish reasonable cause.

CCH (http://tax.cchgroup.com/) reports:

A penalty imposed on an individual for failure to timely file tax returns and timely pay taxes was proper. The individual failed to exercise ordinary business care and prudence; thus, he did not justify his inability to file returns and pay his taxes on time. His difficulties meeting his tax obligations did not constitute reasonable cause for his failure to pay because they resulted from his willful neglect to conserve sufficient assets in marketable form to satisfy his tax liabilities.

He voluntarily chose not to pay estimated taxes when due and made a conscious decision to put his personal financial interests ahead of his tax obligations. The birth of the individual’s children and his wife’s post-partum problems did not qualify as mental and emotional hardships. Further, the individual did not show that the records necessary to prepare the tax returns on time were not available because he had complete control over those records. The IRS also properly allocated payments that the individual did make.

S.C. Schroer, DC Colo.

More Tax Help, IRS News and Tax Relief Tips:

1. Melt Your IRS Fears Away - Tax Help if You Can’t Afford to Pay Your 2008 Taxes
2. Penalty Abatement Helps Taxpayer Resolve Back Taxes
3. Options for Business Owners Struggling to Meet the April 15 Tax Deadline
4. Have You Filed Your Taxes? Consequences Include Increased Financial Liability and Imprisonment
5. Income Tax Relief Advice for the 35 Million Taxpayers Currently in Trouble with the IRS

Tags: delinquent tax returns, failing to file federal tax return, failure to file, IRS help, IRS problem solver, irs problems, IRS tax problems, Michael Rozbruch, Penalty Abatement, reasonable cause, tax resolution, tax resolution expert, tax resolution services, unfiled tax return, unfiled tax returns

This entry was posted on Tuesday, April 14th, 2009 at 7:51 am and is filed under Tax news and tips. 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.