Taxpayers often have a myriad of reasons regarding why they fail to file taxes on time or at all. Some of these reasons are good reasons. For instance, the taxpayer may have suffered from a serious medical condition in the weeks or months leading up to the filing deadline. Now, a serious medical condition is certainly something more than the flu or a bad cold, but for individuals suffering from a severe illness or condition like cancer, this can potentially serve as good cause for the failure to file. But, for other taxpayers their reasons for a failure to file are less justifiable, and may simply come down to the fact that they forgot or thought that the IRS or California Franchise Tax Board (FTB) wouldn’t notice. Concerned about tax filing? Contact a Sacramento tax lawyer of NewPoint Law Group, LLP.
Why Should I Fix Unfiled Taxes?
To start, most Americans have an obligation to file taxes. While it is true that there is a minimum income threshold that makes a tax filing mandatory, the threshold is set to an extremely low level. Most people living and working in California will surpass this tax filing trigger and hold an obligation to file a tax return for the year. Consider that the 2015 levels for filing a federal tax return were set at $10,300 in gross income for a single filer under the age of 65. For individuals 65 years or older, the threshold was bumped slightly to $11,850 in gross income. Limits for heads of household and married taxpayers filing jointly are somewhat higher, but they are unlikely to provide much relief for individuals. The threshold for heads of household under the age of 65 was $13,250. The threshold giving rise to a federal tax filing obligation was $20,600 for married taxpayers filing jointly when both taxpayers are under age 65.
Thus, the first reason you should always file taxes is because you are most likely required to do so by law. The failure to file taxes can be met with an array of consequences and penalties. At the lower end of the spectrum, the IRS or other taxing authority may file a typically unfavorable return on your behalf. The more serious consequences can include criminal tax penalties relating to interference with the administration of the Tax Code under 26 U.S.C. § 7212 or tax evasion under U.S.C §7201.
Filing a Tax Return Is the Only Way to Claim Your Refund
Aside from the potential consequences posed by administrative action, or civil or criminal tax penalties, the other major reason taxpayers should always file a return is because it is the only way to claim a refund. The failure to file your taxes means that you will be unable to obtain any amount the government may be required to repay. Essentially, you are giving the government an interest-free loan on your money if you fail to file. If the failure to file continues for long enough, you are simply giving away your hard-earned money, since you will lose your right to a claim after three years.
More Than One Million Taxpayers Will Soon Lose Rights to Nearly $1 Billion in Unclaimed Tax Returns
According to statements by the IRS made on Thursday, March 10, 2016, there are more than one million taxpayers who have failed to file 2012 returns and are due tax refunds. These refunds total to nearly $1 billion dollars meaning that the average unclaimed return is in the ballpark of $700. The deadline to claim these returns is quickly approaching and falls on this year’s April 18th tax filing and payment deadline. However, taxpayers who wish to claim their 2012 refund will also have to make sure that they are compliant with their 2013 and 2014 tax year filing obligations. Moreover, correcting this filing oversight may also entitle them to the benefits of the Earned Income Tax Credit (EITC).
Avoid Penalties and Speak With a Sacramento Tax Attorney
The reasons to fix your nonfilter status for past tax years involve both the carrot and the stick. On one hand, taxpayers can avail themselves of cash refunds and tax credits they are entitled to receive but have failed to claim. On the other hand, correcting unfiled taxes also protects the taxpayer from the potential consequences of an audit or another type of enforcement action. After all, a tax audit is bad enough, but facing criminal tax charges is even worse.
Time is of the essence to fix unfiled 2012 tax returns. To discuss your failure to file taxes and how to fix it to claim your refund, call the experienced Roseville unfiled tax attorneys of the New Point Law Group at 800-358-0305 or contact us online today.