Benefits to filing a delinquent tax return in a timely manner

bigstock-Current-tax-forms-and-pencil-o-58757438There are multiple reasons why someone may not file a tax return by the date it is due. Sometimes it’s the result of procrastination. In other situations, a person may avoid doing it because they owe money and are unsure of how to cover that financial expense. On some occasions something beyond a person’s control can be the reason for their delinquent taxes. Regardless of why someone is delinquent in filing a tax return, it is important to take action as quickly as possible to rectify the situation. Doing so could benefit the tax payer in several ways.

First, failing to file a tax return could impact a tax payer’s ability to obtain a loan. Copies of filed tax returns are one of many types of documents that are reviewed when a financial institution is determining whether or not a loan will be granted.

Second, it could make a difference regarding your eligibility to receive Social Security Disability or retirement benefits. Since many people may find that they need to rely upon those benefits to get by financially, it is vital that information that is pertinent to the receipt of those benefits be reported via a tax return.

Next, sometimes it is possible that the failure to file a tax return could result in the loss of a refund. If a tax return is more than three years delinquent, the tax refund will be lost. Since a tax refund is the return of a tax payer’s own money, most assuredly you wouldn't want to lose it. In addition, taking steps to file a tax return as quickly as possible after its due date has passed could impact the amount you have to pay in penalties and interest charges.

It is possible that a person who fails to file a tax return on time is confused or has questions about an aspect related to the filing. In such cases, individuals who find that they are in that situation could benefit from consulting with a tax lawyer.

Contact Robert J. Fedor, Esq.

 

Source: Internal Revenue Service, “Filing Past Due Tax Returns,” Accessed Dec. 5, 2014