Mistake #1: When dealing with the IRS/Minnesota Dept of Revenue

Eagan MN

12 April, 2021

11:54 PM

Description

Not Filing a Tax Return because you do not have the money. I represent clients in IRS examination and Collection cases in Twin Cities, Minnesota. One of the mistakes that taxpayers (and their tax practitioners) make is to not file a tax return simply because they cannot pay the balance.  The taxpayer is thinking "since I cannot pay the tax, I do not need to file the tax return, the IRS will not know about it". "I will file it with the IRS later when I have the money". That is the last thing you want to do dealing with the IRS or Minnesota Department of Revenue. The IRS assesses a “Failure to file” penalty for taxpayers who fail to file the tax return timely: either by April 15th or by the extension deadline. The penalty is 25% and accrues at 5% per month for each month the return is not filed. We can often work out a deal– installment agreement, currently-not-collectable, Offer in Compromise etc. - if we get involved in the IRS case early on. The best advice we have is to file the tax return timely, thereby saving yourself an extra 25% hit on the tax liability and working out a deal with the IRS to get it resolved. Avoiding the issue will only make it worse. If you have any questions regarding tax issues in Twin Cities, Minnesota ,do not hesitate to contact me at (612)516 5878 or by email at [email protected].