Non-filing Isn’t a Good Option for Taxpayers

The events of 2020 were both a reprieve for Coastal Southeastern NC taxpayers (like you) and a nightmare for tax pros (like me). And the complications of that year and the one following created a backlog for the IRS. That’s one of the reasons they shut off the reminder notices to non-filers and those with tax debt still owed.

The only problem is, now — three years later — those reminder notices are still on pause. In the absence of IRS notices, it’s easy to get a little too comfortable with evading your tax obligations. After all, out of sight, out of the IRS’s mind… right? (not really)

Beware: A shift is coming. About a month back, the National Association of Enrolled Agents sent a letter to the IRS Commissioner with one request: step up compliance activities. That includes resuming “Balance Due” reminder notices as well as non-filing letters.

And with the IRS more equipped to manage compliance efforts (thank you American Rescue Plan), know that the non-filing/paying approach won’t bode well going forward.

Truthfully, though, that’s always been the case. It seems like a prime moment to emphasize this. Not filing your taxes is a terrible decision. The same goes for not paying your taxes.

Unfortunately, these decisions are ones I’ve seen plenty of people make and the reason that people come to me for help. But it’s not really because they’re lazy or negligent (though some are).

Most of the time, if you decide to let the filing deadline pass you by and not file, or you decide to simply delay paying what you owe, it’s because you don’t have the money to pay your taxes. And you’re hoping you can outwait the IRS’s statute of limitations on collecting payment.

I’ve seen people avoid filing taxes for 10 years because they had some big distributions and transactions one year, and they wanted to avoid shelling out to Uncle Sam. Or others who owe tens of thousands (even hundreds of thousands) and haven’t paid the balance in years. Trust me, that will only get worse over time… and if you’re holding out for bankruptcy, know that it doesn’t discharge a lot of tax debt.

It’s understandable in our current economy why you’d want to delay your taxpayer obligations. But if you’re hoping the IRS just won’t have capacity, and you’ll squeak on past their audit eye, know that those days are numbered. The IRS’s job is to collect taxes, and they are taking it seriously.

So, let me give you some *suggestions* (strong ones) if you’ve been in the non-filing, non-paying crowd:

  • Log into your IRS taxpayer account to see where your tax standing is at.
  • Figure out which years you didn’t file for and file for them. If it’s your 2022 taxes, even now, past the deadlines and looking into the 2024 season, it’s something you can still do.
  • Make a plan for repaying what you owe. The IRS will negotiate. They just need some communication from you.
  • OR… let me take some of that burden off your shoulders and make a plan of action for facing it all.

All it takes is scheduling a time to chat. You’ll find relief from the pressure and get the support you need to tackle your tax situation.