The Penalties If You Don't File Your Taxes For One Year?

As a US citizen living abroad and working for many years, I have not filed the tax returns for about a year. However, I am scared now as I may face a series of consequences or penalties. While looking for solutions on the internet, I have suddenly come across Important Facts about Filing Late and Paying Penalties in the government website.

So I have decided to go deep and study how I may be framed for not paying the taxes. The failure to file the return within the deadline and the grace period comes under the assessment of the tax department and they will put me under the failure-to-file section. I have to pay about five percent of the unpaid tax and the same amount will apply to every month. However, I may have to pay hundred percent of the unpaid amount as I have failed to pay taxes for about a year now.

Getting Horrible Surprise

I may discover suddenly while withdrawing money from an ATM abroad that my accounts have been frozen. Apart from this, the bank may intimate me that my accounts have been locked and IRS has seized my assets. The IRS itself may send me notifications stating that I have been assessed for specific dollars and the number of backlogs I may need to clear to comply with the system. The number provided in the letter is for calling the authorities with the case number so that the issue can be resolved before it turns into a nightmare. 

Read Also: 7 Basic Federal Tax Terms Which is you Should Know 

Knowing It Inside Out

While the penalties and the interest accrue until the tax is paid in full, the amount is about five percent every month going up to about twenty-five percent and an interest amount of about three percent may be levied on top of the prevailing rate of interest.  I have to clear the matter personally as soon as possible so that it can be resolved as soon as possible. When it comes to Filing US Tax Returns When Living Abroad, liens are placed on my Physical assets such as house and cars. The authorities may also seize and freeze the financial accounts without a prior notice or warning. 

Personal Loss

Apart from the legal ramifications of not filing the tax returns every year, I may waste the efforts of staying abroad as I may have to give up the substantial tax benefits that would have applied in my case. The steps I may have to take to resolve the matter may not be as easy as it sounds. Refusing to comply with the requirements of the IRS can lead to jail or imprisonment. I have a feeling that I must file the return every year to avoid such predicaments.

Technological Wizards 

As technology has allowed me to stay in touch with the tax authorities abroad, I must pay attention to the norms of the tax filing returns. Failure to pay also facilitates the IRS to capitalize on the technological advancements to get hold of my presence to ensure that the tax filing requirements are completed within the timeline.


Read More: Federal Tax Rules for us Citizens Living Abroad