Greenville Unfiled Taxes Attorneys
Efficient and Reliable Tax Debt Solutions
No one likes dealing with taxes. The process of filing federal or state tax returns can often seem overwhelming, and many Americans put off filing until the last possible minute. Some others choose not to file at all, but having unfiled taxes on your books can lead to serious consequences.
Our Greenville unfiled taxes lawyers at Southeastern Tax Advocates are knowledgeable and experienced in tax law and can help you if you have fallen behind on filing your taxes. We are a subsidiary of Merline & Meacham, P.A., which has served clients throughout South Carolina since 1970. We are committed to helping you overcome problems involving federal, state, sales, and foreign taxes. One of our experienced attorneys will work with you directly throughout the process and will be available to answer questions, address concerns, and provide updates.
What Happens If I Do Not File Taxes?
No one enjoys it, but everyone needs to file taxes each year. South Carolinians will need to file a federal tax return with the Internal Revenue Service (IRS) and a state tax return with the South Carolina Department of Revenue.
Typically, “Tax Day” – or the final deadline for filing these returns – falls on April 15th. The IRS and state taxing authorities will sometimes extend this deadline during a crisis, as they did during the COVID-19 pandemic. If you are unable to file for taxes by the set deadline, you will need to file for an extension.
But what happens if you simply do not file your taxes at all? Maybe you know you are going to owe more than usual and do not want to be on the IRS’s radar. Maybe you hope that taxing authorities are too overwhelmed and your return might slip through the cracks. Or maybe you simply forgot.
Regardless of the reason, tax returns that are not filed by the deadline are subject to late fees and any taxes you owe will immediately begin to accrue interest. It is important that you make every effort to file taxes on time to avoid these penalties.
What Are Failure to File Penalties?
The IRS and state taxing authorities, including the SC Department of Revenue, consider “late filing” and “late payment” to be separate issues. Consequently, each offense results in different penalties.
Even if you know you are going to owe more taxes than you can currently pay, it is still advisable to file your tax returns on time. This can help you avoid late filing penalties and limit your overall tax liability. Failing to file your taxes on time will only end up costing you more money.
The IRS charges a penalty equal to 5% of your tax debt for each month a tax return is filed late, maxing out at 25%. This means that if you filed your taxes three months late and owed $1,000, you would be hit with a 15% late penalty, raising your liability to $1,150. In addition, if you fail to file within 60 days of the deadline, you will be assessed a minimum late fee of $435 (for 2020 tax returns) or 100% of the balance due on your tax return, whichever is lower. If you only owe $200 in taxes, you will need to pay an additional $200 (100% of what you originally owed) if you file 60 or more days after the deadline.
The SC Department of Revenue currently operates under similar rules for state tax returns. You will be charged 5% of the amount you owe in state taxes for each month past the filing deadline. Again, this penalty maxes out at 25%.
Some people deliberately choose to not file their tax returns because they know they cannot pay what they owe. While this is in some ways an understandable instinct, it has an unintended and unfortunate result.
The reality is that failure to file penalties can be considerably higher than failure to pay penalties. In other words, it always makes sense to file on time, even if you cannot pay immediately. Unfiled taxes still accrue late payment penalties, so there is no disadvantage to filing as quickly as possible. Our Greenville unfiled taxes attorneys can help you understand your options if you are concerned about being unable to pay after filing.
Both the IRS and SC Department of Revenue assess 0.5% of your return’s tax bill for each month you do not pay. This penalty maxes out at 25%. Fortunately, failure to file and failure to pay penalties do not stack. This means that if you do not file, you will not also have to deal with failure to pay penalties. Remember that failure to pay penalties are significantly lower than failure to file penalties, however.
The IRS also charges interest for unpaid taxes. Interest will begin to accrue immediately after payment is late and continue to do so until the debt has been paid or settled. The interest rate is the federal short-term interest rate – which can fluctuate – plus 3%. This interest will begin to accumulate regardless of whether you file.
Some people still mistakenly believe that you can “escape” the IRS and avoid paying their fair share of taxes. “Forgetting” to pay your taxes can result in serious financial consequences in the form of penalties and interest, but deliberately attempting to cheat or outsmart the IRS (or any taxing authority) may be considered tax evasion, which is a federal crime.
When you do not file your taxes – no matter the reason – the IRS and state taxing authority will eventually catch up to you. If you do not take decisive action, you can suffer even more drastic repercussions. Do not assume you are in the clear just because you do not hear anything immediately.
Once the IRS has noticed you have not filed your taxes, they will file a “substitute return” on your behalf. The agency will draw upon available resources to estimate your tax return, but they will not act in your best interest to minimize your tax liability. In other words, your “substitute return” will likely be suboptimal. It will include little to no expense deductions and likely result in a higher balance due than you would have incurred had you filed a return with the help of a tax professional.
The IRS (and other taxing authorities) will use a substitute return to assess what you owe, and late filing fees plus interest will be retroactively applied. They will then begin the collection process, which involves sending formal notices that you owe taxes. The IRS and other taxing authorities will generally send several of these notices and warnings to you before taking further action.
If you receive a Notice and Demand for Payment and have not filed your taxes, we can help. Do not wait to seek professional legal assistance if you find yourself in this situation.
If you continue to ignore IRS collection efforts, the agency will sooner or later resort to more drastic collection actions, including:
- Wage Garnishments. Taxing authorities can seize a portion of your paycheck to repay outstanding tax obligations until the debt is satisfied or settled.
- Liens. A lien functions as a legal claim on the property it encumbers. Taxing authorities may place liens on your home or vehicle that will prevent you from selling or transferring ownership of those assets. Liens will generally only be released when the underlying tax debt is settled.
- Levies. Taxing authorities can seize and liquidate many types of monetary and physical assets, including your bank accounts, retirement accounts, vehicle, or home.
Our Greenville unfiled taxes lawyers at Southeastern Tax Advocates can help you avoid these serious consequences. No matter your circumstances, tax relief options are available. Our experienced team can help you explore various settlement and repayment options.
 Southeastern Tax Advocates is a subsidiary of Merline & Meacham, P.A. All client cases will be handled by an attorney of Merline & Meacham, P.A. who primarily practices in one of our offices at 812 East North Street, Greenville, SC 29601 or 723 Laurel Street, Columbia, SC 29201.
Any result the law firm may have achieved on behalf of clients in one matter does not necessarily indicate similar results can be obtained for other clients.
“I have known and worked with Verne McGough, for years. As a fellow attorney but in a different field of practice, he is the ONLY tax attorney to whom I will refer anyone. He is organized, prompt, and extremely knowledgeable in his field.”- Eydie T. (Attorney, Not a Client)
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