Delinquent Tax Returns? Here’s 3 Reasons You Shouldn’t Rush to File

Do you have delinquent tax returns? Have you received an IRS Notice instructing you to file an overdue or un-filed return immediately?

Don’t do it. Not just yet, anyway.

Don’t get me wrong–I believe Americans should render unto Uncle Sam what is Uncle Sam’s (but not a penny more).

It’s very important to file and pay your taxes a timely manner. If you don’t, you will have to deal with the various attempts the IRS makes to get you to file. If you still don’t file, they’ll go ahead and file for you. And then turn you over to the world’s best collection agency to obtain the tax money you owe. (Now with that disclaimer out of the way, let’s proceed…)

Here’s three simple reasons (you probably haven’t thought about) why you shouldn’t rush to file delinquent tax returns:

  1. If you have a refund coming to you, and you file more than 3 years past the due date (including validprocrastinationextensions), most of the time the IRS will keep the refund. The IRS will not even offset the refund against an old tax liability from another year.
  2. If you are in an Installment Agreement to pay a prior tax liability, or in an Non-Collectible Status, the filing of any return or the paying of any tax late will void the agreement.  This will cause all money to become due immediately.  Often when an agreement is in default, taxpayers find out via a levy on their bank account, their spouse’s paycheck, a lien on their house or seizure of other property.
  3. You’ll likely regret not giving yourself sufficient time to reflect on the accuracy of the return. Don’t let the IRS, bully you into filing a return so quickly that it is full of errors. This may increase your tax debt or cause an examination.

ANCHOR ON THIS: IRS Notices can be intimidating, in both format and tone. But don’t let their deadlines and strong language mislead you. Don’t operate out of fear by letting the IRS dictate how and when to proceed. A knee-jerk reaction can adversely affect your IRS tax matter in the long-term. For more information on how to deal with the IRS to resolve your tax matter, permanently, contact a tax pro who specializes in IRS Representation.

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