There may be a variety of reasons why people do not file taxes. It can be a matter where the Internal Revenue Service owes them a refund and they chose not to file, at least before the April 15 deadline.
There are, however, common reasons given each year by those not to file that can lead to real problems. Common excuses include:
- Not having the money to pay
- I didn’t pay the previous year, and now filing will make matters worse
- They take too much from hard-working Americans
They look at the non-payer’s intent
The IRS takes a dim view on those who do not file if they owe money, and they eventually catch up with the non-filer. When they do, several penalties come into play if the IRS believes the non-filer is committing tax evasion.
It comes down to a question of intent: They encourage people to come forward and will not treat those who made a simple mistake too harshly. They are usually amendable to setting up a payment plan instead of pressing charges. Generally speaking, more cooperation lessens the chances of prosecution.
When do they prosecute?
As with the infamous Al Capone, the famous mobster who was finally convicted of tax evasion, the IRS will prosecute if income was obtained by fraudulent means or racketeering. Blatantly ignoring tax obligations year after year will also catch their attention, mainly if it is clear that the non-filer has enough money to pay.
Finding a tax attorney is a good start
Those who feel stuck between a rock and a hard place can turn to an experienced tax law attorney. They can work with both the client and the IRS to resolve issues of non-payment. Once this happens, folks can pick up the pieces and move on with their lives.