Non Filer IRS Notices - What Happens If You Do Not File

Understanding Non Filer IRS Notices

Filing taxes is a fundamental responsibility for taxpayers in the United States. Failing to do so can result in penalties and legal actions by the Internal Revenue Service (IRS). The IRS uses non-filer notices as a means to inform individuals of their obligations and possible enforcement actions if they continue to neglect their filing duties.

The Consequences of Not Filing Taxes

When you don't file your tax returns, the IRS can impose various penalties and take several actions:

• Failure-to-File Penalty: The penalty is typically 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25% of unpaid taxes (26 U.S. Code § 6651).
• Substitute for Return (SFR): If you fail to file, the IRS may file a return on your behalf. However, the SFR might not include deductions and credits you may be eligible for, often resulting in a higher tax liability (26 U.S. Code § 6020(b)).
• Tax Liens and Levies: Failure to address your tax liability can lead to federal tax liens on your property or levies on your financial accounts (26 U.S. Code § 6321).
• Criminal Charges: In extreme cases, the IRS can pursue criminal charges for tax evasion (26 U.S. Code § 7201).

Types of IRS Notices for Non Filers

The IRS sends various notices based on your tax situation. Some common notices include:

• CP59: This notice is sent when you appear to have not filed a tax return and the IRS records indicate you must file.
• CP515: Issued when the IRS has no record of your return and reminds you to file it as soon as possible.
• CP518: A more urgent follow-up to previous notices, reminding you of potential enforcement actions.

Steps to Take If You Receive a Non Filer Notice

Receiving a non-filer notice can be alarming, but taking prompt action can mitigate the consequences:

• Review the Notice: Carefully read the notice to understand what the IRS is requesting.
• File Your Return: If you haven't filed yet, do so promptly. Include all necessary documentation and payments.
• Contact the IRS: If you believe there is an error, contact the IRS for clarification.
• Consider Professional Help: Consult a tax professional if you need assistance navigating your obligations or the filing process.

How to Avoid Future Non-Filer Notices

Prevention is always better than cure when it comes to dealing with IRS notices. Here’s how you can avoid future issues:

• Set reminders: Keep track of tax deadlines on your calendar.
• Organize Finances: Maintain organized records of your income, expenses, and prior tax returns.
• Regular Consultation: Meet with a tax advisor regularly to ensure compliance.

Conclusion

Ignoring IRS notices can lead to significant financial and legal issues. It's in your best interest to file your returns timely and respond to any IRS notices promptly. Keeping your tax affairs in order can save you from unnecessary stress and potential legal troubles.

For further assistance and to manage your tax documents effectively, visit your dashboard.