Arguments the IRS Won’t Accept
You may have a very good reason for not handling your taxes, but is it one the IRS will accept? While you may be dealing with pressing personal issues, there are seldom instances when you’ll be excused from fulfilling your tax duties. Nevertheless, some taxpayers will do just about anything to delay or avoid dealing with the IRS.
No matter what crisis you’re grappling with, filing your return or handling a tax debt should be high on your priority list. In certain instances, the IRS will grant you an extension to resolve a problem. Generally speaking, though, you shouldn’t assume you won’t be held accountable for missing an IRS deadline. Consider some taxpayer arguments the IRS will likely consider invalid before waiting on your taxes:
“I’m too busy to file my taxes”
If you’re supposed to file your return by April 15th, you should have plenty of time to get it done. Even if you require assistance, you can schedule an appointment in advance for a free afternoon or evening (in most cases, the actual preparation will only take an hour or two). If you’ve fallen behind and you think you’re going to miss the initial deadline, you can request an extension to get your return in by October 15th. In the event that you owe, you may be held liable for interest from the delay, but you’ll be in the clear with the IRS. What you don’t want to do is simply not file. This can lead to major complications with the IRS, including penalties, interest and an unnecessary tax debt.
“I heard that filing a tax return was optional”
Some low-income taxpayers aren’t required to file a return, provided they fall under a certain income threshold (see irs.gov for current criteria). There are also a handful of special exceptions when it comes to reporting income, but you typically cannot choose to just opt out. The last thing you want to do is to rouse the interest of the IRS, who may think that you’re willfully evading your tax responsibility. This type of activity can lead to penalties and even legal prosecution.
“No one ever told me that I had a tax debt”
In the unfortunate event that you wind up with a tax debt, the IRS will let you know. However, if your address is not current or you’re away for an extended period of time, you can’t avoid IRS action by simply saying you didn’t know about it. In fact, neglecting to respond to IRS notices can lead to aggressive collection efforts, including a wage garnishment or bank levy. If you suspect you have a tax debt or you’re not sure if the IRS has your current address, find out before any problem gets more complicated.
“I don’t have the money to take care of my tax debt”
Although the IRS expects prompt payment for any outstanding liability, they understand this may not be possible. As such, they offer a wide range of resolutions which enable you to handle your debt over an extended period of time, or perhaps for a reduced amount. In certain instances, you may not be required to pay anything at all if, by doing so, you’ll be presented with a financial hardship. In order to understand your options, you may want to consult with a licensed tax professional. Formal tax resolutions can be easily obtained with the assistance of someone well-versed in IRS procedures and your rights as a taxpayer. Whatever you do, don’t assume you’re off the hook without handling your tax problem in a legally amenable way.