Important Tax Tips to Know

Tax Tips to Know

  • In case of a failure to file a tax return, the tax may be assessed or a proceeding in a court for the collection of owed tax may begin at any time even without assessment.

 

  • A un-filed Tax Return (when you owe taxes) does not have STATUTE of LIMITATIONS. The general rule is that the IRS must assess a tax within a THREE-YEAR after a tax return is filed. But if you failed to file a tax return, the IRS has right to examine the tax year any time within your lifetime.

 

  • You can eliminate any possibility of being prosecuted for tax fraud when you voluntarily file all un-filed tax returns.

 

  • Any individual taxpayer who fails to pay estimated tax and fails to file a tax return, the taxpayer may be charged with a misdemeanor, be subject to a jail term of not more than ONE year and subject to a fine of $25,000 ($100,000 for a corporation).

 

  • There is no penalty for failure to file a tax return if a refund is due. In order to receive a refund, the return must be filed within THREE-YEARS of the due filing date. The deadline date for claiming any refund due is THREE-YEARS after the return was filed, OR TWO-YEARS after the tax was paid, whichever is later.

 

  • If a taxpayer willfully does not file a tax return and willfully fails to pay the tax liability, the taxpayer may be charged with a felony and subject to a jail term of up to FIVE years.

 

  • If you are self-employed, you must file your tax return and report self-employment income within THREE years of the due date in order to receive your Social Security credits toward your retirement.