An important deadline is coming up on April 15, 2010. This applies to people who have not yet filed their 2006 tax returns, and who might be eligible for a refund from the IRS. As per IRS regulations, any refund owed by the IRS for tax year 2006 must be claimed by filing a 2006 tax return on or before April 15 2010, failing which the refund amount is deposited into IRS coffers, and cannot be claimed at any time in the future.
Millions of people routinely fail to file taxes on time. This could be due to a variety of reasons, ranging from lack of knowledge about tax filing regulations to intentionally not filing taxes because of an apprehension that the IRS will then not know about certain financial aspects of the person. Whatever the reason maybe, it should be clearly understood that not filing taxes can put one in serious trouble, and the IRS has powerful recourse to make someone pay their due.
IRS regulations allow one to file taxes for prior years. Many late filers owe taxes to the IRS, but what is not so well known is that there are many people who are eligible to get a refund from the IRS, even when filing late. When it comes to owing the IRS money, there is no escape. The IRS will track a person down who owes taxes and they have powerful provisions granted to them by law which they can use to reclaim these owed taxes. These collection mechanisms can include garnishment of wages (where an employer can withhold part of the salary), putting a lien on your home, or taking over your bank accounts. When it comes to a refund, one has to file in a timely fashion in order to obtain the refund. As per law, the IRS gives a filer 3 years from when the taxes for a particular year should have been correctly filed, in order to file late and claim a refund. Thus, the tax filing deadline for tax year 2006 was April 15, 2007. If you have not filed your 2006 taxes yet, and if you are owed a refund, then you must file on or before April 15, 2010, in order to be able to collect the refund. If you do not file by April 15, 2010, and the IRS owes you money, then this can never again be reclaimed.
When it comes to filing taxes, it is never too late. It is always possible to file taxes for a prior year, but one should understand that the consequences of not filing in a timely fashion can be severe. To start with, if you don’t file taxes and owe the IRS, then penalties and interest start to accrue the day after the filing deadline. The IRS may file a “substitute return” for their records. But this return will be based only on information that the IRS has, such as wages, for example. It will not include any exemptions that you might be eligible for, or any expenses that you might be able to deduct. In case this happens, it still is possible for you to file a late return, and the IRS is typically known to adjust your account to indicate the correct figures. Finally, as has been hinted above, the IRS can start a collection process which can impact your life considerably.
At RapidTax we are experienced tax professionals who understand the intricacies of tax law. We have dedicated our website completely to helping clients who have not filed prior year taxes. One thing to keep in mind is that prior year taxes cannot be filed electronically. Based on the information that you input into our easy to understand and state of the art questionnaire, we prepare the necessary forms. Our algorithm goes deeply into tax law and figures out the maximum possible deduction based on circumstances that were in effect in the prior year of your choice. We do a preliminary error check and email you the filled out forms within an hour of your submitting your information on our site. You need to take a print out of the forms, sign them, and put it in the mail so that it is post-marked on or before April 15. For tax year 2006, we once again remind our clients that in case you are owed money from the IRS, you need to post-mark your return on or before April 15, 2010, failing which your money cannot be reclaimed in the future.