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To File Income Tax Return

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1. Avoid Late Filing Penalties

Late filing can result in substantial and continuing penalties. This is in addition to any interest that is due.

2. Receive Better Service from Your Accountant

The earlier you get your paperwork to your accountant, the sooner he can start preparing your tax returns. More importantly, there will be more opportunities to explore and implement tax saving strategies. On the other hand, if you file late, you tie your accountant's hands. For example, he may hesitate to retain profit in your corporation if such profit will be subject to substantial penalties.

3. Avoid Criminal Charges

Of course, if you don't file tax returns at all for a few years, you may also face charges of tax evasion.

4. Prevent Bankruptcy

Generally speaking, persons who don't file tax returns on a timely basis also lack adequate records for managing their business. Since they don't keep their bookkeeping and accounting up-to-date, they only think they know how they're doing and how they stand financially. This, of course, is a recipe for financial disaster.

5. Enjoy Better Relations with Tax Authorities

Late filers also receive the unwanted attention of the taxation departments. Non-compliance can result in audits, aggressive collection action and legal proceedings. In addition, if you ever do have extenuating circumstances that might call for some leniency or extraordinary consideration on the part of the tax department, you are more likely to receive it if you have a flawless history of co-operation and compliance.

6. Obtain Financing

You'll have difficulty obtaining financing if you can't provide your financial institution with current income information. Assessment Notices from taxation authorities give banks more assurance that the income claims you make are true. As well, if you haven't filed your current income tax returns, what hidden tax liabilities exist? What is the state of your record-keeping? How do you run your business without adequate financial information? Your bank may hesitate to loan you money or refinance under these circumstances.

7. Reduce Stress and Worry

Many people who are late filing their tax returns feel guilty about it. At the back of their minds, they worry about taxation authorities contacting them, audits, asset seizures, criminal prosecution, penalties and interest, and so on. Some of these worries can become magnified beyond what the actual situation warrants. Save yourself unnecessary stress by filing your income tax returns on time.

To File Income Tax Return

? Penalties. If taxes are owed, a delay in filing may result in penalty and interest charges that could increase your tax bill by 25 percent or more.

? Lost Refund. In order to receive a refund, the return must be filed within 3 years of the due date. If you snooze, you lose?YOUR REFUND!

? Lost Earned Income Credit. Taxpayers who are entitled to the Earned Income Tax Credit must file a return to claim the credit even if they are not otherwise required to file. The return must be filed within 3 years of the due date in order to receive the credit.

? Lost Social Security Benefits. If you are self-employed, you must file returns reporting self-employment income within three years of the due date in order to receive Social Security credits toward your retirement.

? JAIL!!! Willfully failing to file a tax return is a CRIMINAL OFFENSE. Non-filers of tax returns need to act quickly to avoid criminal prosecution for failure to file a tax return. If you have late tax returns, do not delay another day; delaying can cost you your freedom. Even if you believe that you have paid all the taxes you owe through withholding, or by your employer, the willful failure to file a return is a criminal offense. The best way to avoid criminal prosecution relating to late tax returns is to remedy the situation voluntarily and submit all unfiled tax returns. The IRS is far less likely to pursue a criminal prosecution if you take the first steps in resolving the issue and get all delinquent tax returns filed.

Prosecution Statistics for Non-Filer Cases:

In FY 2006 the IRS obtained:

? Indictments in over half of the non-filer cases it criminally investigated!

? Convictions in approximately 88% of the cases that were indicted!

? Jail sentences were obtained in 80% of the cases convicted!

? Average jail sentences were 40 months long!

File All Tax Returns

You should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on your circumstances, nonfilers with late tax returns may qualify for a payment plan.

In short, delay does not help your situation. If you are a non-filer with delinquent tax returns, you need to file those late returns as quickly as possible.

Documents Required to Prepare a Return

In order to assist with preparing a tax return, taxpayers should bring any and all information related to income and deductions for the tax years for which a return is required to be filed. Some of the documents may include:

? Forms W-2 ? Forms from employers showing wages for the year.

? Forms 1099 ? Forms from banks and other financial institutions showing interest and dividends. Forms 1099 also report self-employment income.

? Information on expenses to claim on the return, such as itemized deductions, child care expenses, or employee business expenses.

? Social Security numbers for dependent children and any other person claimed as a dependent.

Copies of the last tax returns that you filed.

Can I File By Myself'or Do I Need a Lawyer?

Nothing requires you to hire an attorney to file late tax returns.

However, due to the fact that there is a possibility of criminal prosecution, you should STRONGLY consider hiring an attorney to help you file delinquent returns and protect your interests in the process.

Conclusion

Delinquent tax returns are a serious problem. Non-Filers should take immediate action to get late returns filed. Voluntary compliance can help reduce or eliminate exposure to penalties, interest, and possible criminal prosecution. Since willful failure to file a tax return is a crime, non filers should consider hiring an attorney to assist them with coming into compliance.

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About Author

Both Stephen Pope & David Jacquot are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Stephen Pope has sinced written about articles on various topics from Credit Cards, Work From Home and Site Promotion. . Stephen Pope's top article generates over 14800 views. to your Favourites.

David Jacquot has sinced written about articles on various topics from Income Tax Return. Tax Attorney David Jacquot, JD, LLM provides aggressive representation NATIONWIDE to businesses and individuals with tax problems. A description of his education and experience can be found at. David Jacquot's top article generates over 4400 views. to your Favourites.

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