Taxpayers fail to file required tax returns for many reasons. If you have unfiled tax returns, you should be aware that failure to file your tax returns may be construed as a criminal act by the IRS. This type of criminal act is punishable by one year in jail for each year not filed. Needless to say, it’s one thing to owe the IRS money; it’s another to potentially lose your freedom for failure to file a tax return.
The IRS may file “SFR” (Substitute For Return) tax returns for you. This is the IRS’ version of an unfiled tax return. Because SFR returns are filed in the best interest of the government, the only deductions you’ll see are standard deductions and one personal exemption. You will not get credit for deductions to which you may be entitled, such as exemptions for your spouse and children, interest and taxes on your home, cost of any stock or real estate sales, business expenses, etc.
Regardless of what you may have heard, you have the right to file your original tax return, no matter how late it’s filed. Residents in Utah and Salt Lake City have many resources to turn to for help, but as the situation worsens a tax attorney will be the solution that will actually save your finances.