• Failure to File Penalty

    From Rick@21:1/5 to All on Thu Apr 7 19:18:58 2022
    According to the IRS website:

    "The Failure to File Penalty applies if you don't file your tax return by
    the due date. The penalty you must pay is a percentage of the taxes you
    didn't pay on time."

    This statement assumes you have not paid taxes on-time. What happens in a
    case where a person pays their taxes on time each year but simply chooses
    not to file a return?

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From paultry@21:1/5 to Rick on Thu Apr 7 20:19:59 2022
    On 04/07/2022 18:18, Rick wrote:
    According to the IRS website:

    "The Failure to File Penalty applies if you don't file your
    tax return by the due date.  The penalty you must pay is a
    percentage of the taxes you didn't pay on time."

    This statement assumes you have not paid taxes on-time.
    What happens in a case where a person pays their taxes on
    time each year but simply chooses not to file a return?

    Well, money-wise, nothing. Unless. The IRS doesn't know
    all tax has been paid until the return is filed, so they may
    come looking. Or the case may find its way to the
    substitute for return program where the IRS may determine
    the taxpayer owes more than he/she thought, and penalties
    will apply. Self-employed taxpayers will be giving up their
    social security credits if they don't file. Assessment
    statutes don't start running until the return is filed.
    Mortgages and school loans may be hard to get without proof
    of filing.

    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj-kPjAlIP3AhWWm2oFHcRMCawQFnoECBYQAQ&url=https%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-news%2Ffs-08-12.pdf&usg=AOvVaw2tkO-pt-Bdc-nXF7ss8mlJ

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From John Levine@21:1/5 to All on Thu Apr 7 20:44:56 2022
    According to Rick <rick@nospam.com>:
    This statement assumes you have not paid taxes on-time. What happens in a >case where a person pays their taxes on time each year but simply chooses
    not to file a return?

    26 USC 7203 says that failure to file or pay is a misdemeanor, with a
    fine of up to $25K and a year in jail. That is separate from the civil
    penalty for failure to pay.

    But it's hard to see why they would bother if they don't think you owe anything.

    --
    Regards,
    John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From Rick@21:1/5 to paultry on Fri Apr 8 10:42:16 2022
    "paultry" wrote in message news:t2nv3c$rf0$1@dont-email.me...

    On 04/07/2022 18:18, Rick wrote:
    According to the IRS website:

    "The Failure to File Penalty applies if you don't file your tax return by
    the due date. The penalty you must pay is a percentage of the taxes you
    didn't pay on time."

    This statement assumes you have not paid taxes on-time. What happens in
    a case where a person pays their taxes on time each year but simply
    chooses not to file a return?

    Well, money-wise, nothing. Unless. The IRS doesn't know all tax has been >paid until the return is filed, so they may come looking. Or the case may >find its way to the substitute for return program where the IRS may
    determine the taxpayer owes more than he/she thought, and penalties will >apply. Self-employed taxpayers will be giving up their social security >credits if they don't file. Assessment statutes don't start running until >the return is filed. Mortgages and school loans may be hard to get without >proof of filing.

    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj-kPjAlIP3AhWWm2oFHcRMCawQFnoECBYQAQ&url=https%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-news%2Ffs-08-12.pdf&usg=AOvVaw2tkO-pt-Bdc-nXF7ss8mlJ

    I understand the case where the IRS has somehow determined that the taxpayer owes more than he or she thinks. But I'm talking about a case where the taxpayer correctly determines how much tax they owe and then makes sure they pay that exact amount each year through a combination of appropriate withholding and/or estimated tax payments throughout the year followed by payment of any net balance owed by April 15th.

    Why would anyone do this? I don't know - perhaps to make a statement or because they have deep-rooted disagreements with the tax system or maybe
    just to mess with the government in a small way.

    --

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From paultry@21:1/5 to Rick on Fri Apr 8 16:30:15 2022
    On 04/08/2022 09:42, Rick wrote:


    I understand the case where the IRS has somehow determined
    that the taxpayer owes more than he or she thinks.  But I'm
    talking about a case where the taxpayer correctly determines
    how much tax they owe and then makes sure they pay that
    exact amount each year through a combination of appropriate
    withholding and/or estimated tax payments throughout the
    year followed by payment of any net balance owed by April 15th.

    Why would anyone do this?  I don't know - perhaps to make a
    statement or because they have deep-rooted disagreements
    with the tax system or maybe just to mess with the
    government in a small way.


    The IRS doesn't know all that the taxpayer knows until
    he/she puts it on a tax return, and signing that return puts
    the taxpayer on the record that his/her calculations are
    true and correct. Drafting a return to determine the bottom
    line, and paying what's owed, would logically lead to filing
    the return. Why would your hypothetical taxpayer do
    otherwise? Your suggested answers are as good as anyone's.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From BignTall@21:1/5 to Rick on Fri Apr 8 17:06:45 2022
    On 4/8/2022 9:42 AM, Rick wrote:
    "paultry"  wrote in message news:t2nv3c$rf0$1@dont-email.me...

    On 04/07/2022 18:18, Rick wrote:
    According to the IRS website:

    "The Failure to File Penalty applies if you don't file your tax
    return by the due date.  The penalty you must pay is a percentage of
    the taxes you didn't pay on time."

    This statement assumes you have not paid taxes on-time.  What happens
    in a case where a person pays their taxes on time each year but
    simply chooses not to file a return?

    Well, money-wise, nothing.  Unless.  The IRS doesn't know all tax has
    been paid until the return is filed, so they may come looking.  Or the
    case may find its way to the substitute for return program where the
    IRS may determine the taxpayer owes more than he/she thought, and
    penalties will apply.  Self-employed taxpayers will be giving up their
    social security credits if they don't file.  Assessment statutes don't
    start running until the return is filed. Mortgages and school loans
    may be hard to get without proof of filing.

    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj-kPjAlIP3AhWWm2oFHcRMCawQFnoECBYQAQ&url=https%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-news%2Ffs-08-12.pdf&usg=AOvVaw2tkO-pt-Bdc-nXF7ss8mlJ


    I understand the case where the IRS has somehow determined that the
    taxpayer owes more than he or she thinks.  But I'm talking about a case where the taxpayer correctly determines how much tax they owe and then
    makes sure they pay that exact amount each year through a combination of appropriate withholding and/or estimated tax payments throughout the
    year followed by payment of any net balance owed by April 15th.

    Why would anyone do this?  I don't know - perhaps to make a statement or because they have deep-rooted disagreements with the tax system or maybe
    just to mess with the government in a small way.

    --

    The statute of limitations doesn't start until the tax return is filed.
    If the taxpayer doesn't file, they give the IRS as long as the IRS
    chooses to deal with the taxpayer and the missing return. Does this
    taxpayer keep all his supporting documentation for his tax returns forever?

    If the taxpayer did make an error and overpaid taxes for the tax year in question, that refund will be lost if the return is filed more than 3
    years after the original due date

    Estimated taxes and/or withholdings would have generated a credit
    balance at the IRS for that tax year. Eventually, they will send out a
    CP80 notice informing them about the credit balance and asking for the
    tax return to be filed. If they also ignore this, the credits will
    eventually be forfeited. If the IRS ever digs itself out of the current backlogs, they may finally get around to filing a substitute 1040 for
    the tax year after the credits were automatically forfeited. That
    computer generated letter may well demand the taxpayer pay the tax
    again, plus the failure to file penalty, plus the failure to pay penalty
    and years worth of interest. With a considerable amount of time and
    possibly some expensive professional help the taxpayer may or may not be
    able to reduce or eliminate the bill. To me, this scenario seems
    unlikely but it appears to be a totally avoidable risk.

    To me, not filing the return seems simply dumb.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)