1.
Anytime a taxpayer fails to file a return to pay their taxes due or estimated taxes due, they can have income tax issues such as being subjected to a jail term (not more than one year), a fine of $25,000 or possibly $100,000 if a corporation is involved or charged with a misdemeanor.
2.
Any taxpayer who knowingly fails to file a return and also fails to pay that debt, can be charged with a felony which is subject to a jail term of up to 5 years while possibly accruing other penalties as well.
3.
It's possible to avoid income tax issues by willingly filing all returns that have been left un-filed.
4.
The statute of limitations does not begin with an un-filed tax return.
Commonly, the IRS has to assess a tax within three years after a return is filed.
The IRS, because of that failure, has the right to take a look at that tax year at anytime within your lifetime.
5.
The tax can be assessed or a court proceeding can occur to collect the debt without an assessment, if the taxpayer failed to file a return.
6.
Usually there is a penalty assessment of 25% added to the original tax debt owed if the taxpayer failed to file a tax return without justifiable cause.
7.
If you want to hand deliver your tax return and obtain a copy stamped, "received by the IRS" to avoid income tax issues and not worry that your tax return was lost in the mail, you can find the local IRS office at: http://www.
irs.
gov/localcontacts/.
8.
When a refund is due, there is no need to be concerned with any income tax issues or penalties.
The return needs to be filed within three years of the due date to assure your refund.
If after you have filed you realized there was an error on the return, you have up to three years after the return was originally filed to claim your refund or two years after you received payment of the tax, whichever expires later.
9.
If a taxpayer qualifies for Earned Income Credit, they must file a return to receive the credit, regardless whether or not they needed to file.
10.
Self-employed taxpayers have to file tax returns that report their income within three years of the date due to be eligible for Social Security credits for their retirement and avoid any income tax issues.