The statute of limitations for collecting a federal income tax refund is three years after the original filing date (four years for California). If a taxpayer fails to file their income tax return within these three years, the IRS will prevent the taxpayer from doing the following:
- Collecting a refund check
- Applying for tax credits
- Overpaying on taxes
Non-filers cannot receive credits for Social Security retirement or disability benefits because their income was not reported to the Social Security Administration.
If you may need a personal loan or a loan for your business, you should be aware that the loan approval process could be affected by unpaid taxes.
The Internal Revenue Service may choose to file a substitute return on their behalf. California will issue a notice of proposed assessment. When preparing to file a substitute return, the IRS will often send the non-filer a “Notice of Deficiency.” It Is wise to hire legal representation to prevent the substitute return from becoming collectible by filing a tax court petition and to help you settle with appeals via a tax return that takes advantage of exemptions and deductions that will have been routinely denied with a substitute return.
The IRS could place a tax lien on a taxpayer’s property if they do not pay their tax debt. The IRS can also levy the property named in the lien. This could be devastating for a non-filer, especially if the IRS levies property that is needed to operate a business. The IRS will commonly sell a taxpayer’s seized assets via auction for pennies on the dollar.
If you are delinquent on filing an individual or business tax returns or a tax return for your business, you should contact a skilled California Tax Attorney as soon as possible. Call (800) 681-1295 or visit the contact us page of our website to schedule a reduced rate initial consultation.
Public Contact: Dave Klasing Esq. M.S.-Tax CPA, email@example.com