Robert J. Fedor, Esq., L.L.C.

Why you shouldn't ignore that tax mistake

For individuals who have been at the same one job and owned the same home for years, filing a tax return is fairly simple. However, for individuals who own a business, work multiple jobs, freelance or moved to a new state for a job; tax matters can quickly become complicated and confusing. The more complex an individual's income sources and structure, the more complex things typically become come tax time.

In some cases, an individual may inadvertently fail to file a required form. This tax mistake can occur for a number of reasons. An individual may not receive the paperwork needed to file in time or the paperwork may be sent to an incorrect address. Whatever the case may be, individuals who fail to file or pay their taxes on time would be wise to address and remedy the situation as soon as possible.

In cases where an individual learns of a tax mistake months or even years after the mistake occurred, it can be very tempting to simply ignore the matter and hope the IRS doesn't notice. The IRS, however, uses a variety of complex methodologies to identify individuals who failed to file complete tax returns or pay tax bills. It's very likely, therefore that while it may take months or even years, the IRS will eventually take action to ensure a taxpayer files the correct tax forms and pays all taxes owed.

Individuals who fail to address or simply choose to ignore tax mistakes run the risk of accumulating hefty IRS fines and penalties. In cases where the IRS’ attempts to recoup tax debts are ignored, the agency may take action to impose a tax lien which becomes public record and can significantly and adversely affect an individual's credit report.

In some cases, depending on the circumstances and amount of tax debt, an individual may even face criminal charges. Taxpayers, who are dealing with tax debt problems, would be wise to contact a criminal attorney who handles tax-related matters.

Source: Fox Business, "What to Do if You Forgot to Pay Taxes," June 3, 2014

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