Tax return season is quickly coming to a close, so it is very important that Michigan taxpayers file their return before it is too late. We have been asked by many of our Detroit area client’s what will happen if they do not file their tax return, which is a very good question.

Whether you innocently forgot or simply chose not to file, the IRS isn’t very compassionate to non-filers, though, it is smart to contact the IRS after the fact. While the IRS has the capabilities to file a return for you, based solely on information from outside sources, it will not include exceptions or expenses you may qualify for….thus, a loss of cash.

Perhaps the greatest consequence concerns penalties and interest. Each month after the file date, you will have to pay the IRS interest of .5% of tax owed until the tax is paid in full or until the 25% maximum penalty is reached. If the amount is still unpaid/not filed at this time the IRS will issue a notice of intent to garnish your wages. 10 days after this notice is given, and the tax is still unpaid/not filed the interest will increase to 1% of the total tax. In addition, you will also owe a late-filing penalty fee which is typically 5% of the tax owed to be incurred each month. After 60 days, the penalty is then $135 or the tax amount in full.

It is important you file your taxes on time and correctly to avoid punishments from the IRS. If you need assistance filing or are subject to penalties and levy notices due to the lack of filing, the tax attorneys at Pure Tax Resolution can negotiate with the IRS. Call us today at (248) 329-1160