Does the IRS Know?
All established businesses and employees will receive tax forms each year; copies of those forms will be sent to the IRS. If you don’t file these forms then the IRS will be alerted. However, if you don’t file and you’re expecting a refund, the IRS won’t do anything. The year in which you do owe them money they will flag you and take action, but this may take a few years.
Can You Go to Jail?
Tax fraud and evasion are serious crimes, and if serious enough, jail is a possibility. However, most cases will not end with jail time because the IRS would rather receive the money than deliver a punishment. Instead, you will receive a punishment that is comparable — an endless amount of paperwork and a gruesome re-filing process. Rectifying this issue can take over a year so it’s best to be on top of this paperwork.
How Much Will You Owe?
Any of the money that you owe from your original taxes will need to be paid, as well as multiple fines and interest. Not filing can cost you a penalty of 25 percent, not paying your bill on time can cost you an additional 25 percent, and there will be a 3 percent per year compounding interest. It’s best to fully comply, pay all that you owe, and ask for installment plans to help you out with the payments.
Failing to file your taxes can be dangerous waters to enter, so tread lightly and avoid this severe mistake. When you need representation in front of the IRS or need help with filing your taxes, contact the experts at Berkow, Schechter & Company LLP. To learn more, or to schedule an appointment, give us a call at (203) 356-1061.