Tax Non-Filers: Who Are They Hurting?
Nobody likes to admit it. The problem affects people of all ages, economic levels, political affiliation, religion and ethnicity.
Some people just do not like to file income tax returns – not that it’s a joy for the majority of taxpayers. Others just do not or will not file.
Having practiced for more than 30 years, predominantly in tax return preparation, I have had extensive experience in dealing with non-filers.
Surprisingly, these are not all bad people. They include your friends, relatives and neighbors. They might include someone who just lost a job, or is having business problems, had a serious illness or a death in the family.
Non-filers include individuals, businesses, trusts, estates and non profits. I have filed overdue returns for members of the clergy and a controller of a Fortune 500 company. I have filed as many as 15 years of back tax returns.
How does this happen? People can fall into a trap. They do not file once and continue to not file year after year. Others do not file because they believe they owe tax and cannot pay. Some thought they did not make enough money and did not owe any tax.
This is not always true. I have had clients that owed no tax after filing past due returns and getting into full compliance. I have had clients that actually lost tax refunds for filing late. Others are simply afraid of the Internal Revenue Service (IRS). We often hear people actually brag that they have not filed in many years. I have always felt that non-filers could be suffering from a form of mental illness. I think this would make a good psychiatric doctoral thesis.
What does the IRS or your local city or State want you to do? They want you to file!
The IRS and other taxing authorities can offer assistance in tax preparation, penalty reduction and payment plan arrangements for tax due.
What can you do to help? Refer non-filers to a qualified tax professional who can guide them into filing past due tax returns and in dealing with the IRS.
Refer your associates to a CPA who can deal with threatening notices from the IRS.
You could be doing a friend a great favor.