Consequences of failing to file an income tax return

The obligation of preparing and filing of a return

A taxpayer may ask someone to help him prepare and file his income tax return.  He may even hire a professional New York Tax Attorney or accountant to prepare his return and file it.  Just the same, the obligation to prepare and file the return belongs to the taxpayer.  The obligation to see that the information contained in the return he files is accurate and truthful also rests on the taxpayer.  When he is prosecuted for failing to file a return or filing a false or fraudulent return, he cannot shift the obligation by saying that he had hired a professional to prepare and file his return for him.

Tax fraud

There are offers and schemes proposed by people that promise exemptions from the obligation to pay taxes or to file returns. Be wary of these schemes as these may cause you to lose not only your hard earned money but also render you liable for prosecution and imprisonment if there is proof that you participated in those schemes knowingly so as to evade paying taxes.

Tax return preparer

Legal and accountancy firms often offer services to help the taxpayer prepare his income tax return and file it. Hiring someone else to prepare your tax forms for you is not against the law.  However, you must carefully choose the person or firm that will prepare your tax forms. Not only most you choose a New York Tax Attorneywho is competent and experienced, you must also choose one who has integrity.  Filing a false or fraudulent return will ultimately be the responsibility of the taxpayer.  And it is the taxpayer who stands in danger of being imprisoned for tax evasion and tax fraud should there be any falsity found in his return.

One advantage of asking a competent and experienced New York Tax Attorney to prepare a tax return is that a Tax Attorney can give you advice as to the implications of the information you include in your tax return. A Tax attorney who helped you prepare your return can help you prepare your defenses in case of a tax audit or a tax collection suit.

Substitute return

When the taxpayer fails to file a tax return or when the taxpayer fails to file an accurate return the IRS will file a substitute return for the taxpayer.  The IRS may not list down all the deductions and exemptions that the taxpayer can legally claim.

Along with this substituted return, the IRS will send the taxpayer a Notice of deficiency with an accompanying tax assessment. A tax assessment is the amount that the IRS will claim as due to them after investigation of the taxpayer’s past tax records and your financial transactions.

When he receives the substitute return and the Notice of Deficiency, the taxpayer is also given a period of ninety days or three months within which to file a past due tax return or to file a petition in Tax Court to protest the assessment.

The taxpayer is also given the opportunity to submit documents to prove the actual amount of income actually received.  The IRS will adjust the assessment in accordance with the figures that have been proven by the documentary evidence submitted by the taxpayer.

Consequence of refusing to file a return and to pay taxes

If despite the substitute form filed by the IRS and the Notice of Deficiency sent to the taxpayer, he still fails and refuses to pay his income taxes, the IRS will begin the process of collecting the taxes due.  The IRS can levy on the taxpayer’s wages, bank accounts or post a tax lien on the taxpayer’s properties.

We at the Maxwell Law Firm, PLLC assist clients with filing tax extensions, tax return preparation, amendments, tax collection defense, tax settlements, and other services. If you need assistance please feel free to call us at 718-701-0095 to discuss your options.

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