What does it mean to be compliant? It may sound like common sense but filing your taxes on time is the number one tip to staying in front of your IRS issues while reducing penalties and fees. Personal tax returns for 2019 are due April 15th. If you are unable to file on time then do the next best thing and file for an extension. Personal filings for extensions are due October 15, 2019. But don’t do like everyone else and wait until October 14th to pull out your shoe-box full of receipts. Get it done ahead of time even if you actually file on the last day.
To a lot of taxpayers, who believe they will owe taxes but cannot pay now, this may seem counter-intuitive. They think that there is no point in filing their taxes on time or filing period. They could not be more wrong! In many ways, you will actually be in a worse position not filing on time even if you owe taxes and cannot pay.
Why it’s Important to File Your Taxes on Time and Be Compliant
- When you do not file your IRS tax return you will incur a Failure to File Penalty and a Failure to Pay Penalty. So if you are trying to keep what you pay to the IRS to the least amount possible….file on time. Penalties and Interest can accumulate into a substantial part of your tax debt. They start accumulating from when the tax liability was due. Best practice – File when due even if you cannot pay.
- When you file a return you will know what is due to the IRS. I always think it is better to know exactly what is owed than to have a mysterious bill looming over your head. If you do not file you force the IRS to create an estimated substitute return, filling in the blanks for you. I do not need to tell you that normally this never works out in favor of the taxpayer.
- When you file a return, whether you pay the tax liability or not, it starts the statute of limitations on IRS collection. The clock starts ticking and in this case in your favor. As a general rule, there is a ten-year statute of limitation on IRS collections.
- If you have a tax liability, the IRS will not talk and negotiate with you unless you are compliant with all your tax filings submitted.
File your taxes on time to avoid unnecessary additional penalties.
Put yourself in a position to negotiate with the IRS.
Millennia Tax Relief prides itself on being a trusted partner in the Tax Resolution arena. Give us a call for assistance in filing your back taxes and help in resolving your tax liability issues.