April 15th – or there about – is a date that many people dread. It is safe to say that most people do not get excited about filing their tax return. It is a confusing process involving complicated calculations and many different forms depending on your financial situation and the circumstances of your life.
The Internal Revenue Service recently announced that quite a few taxpayers should have filed their 2011 returns. Why? Approximately one million people have refunds waiting for them that add up to about one billion dollars. In California alone, an estimated 103,000 people have an unclaimed median potential refund of $627. The good news is they still have until this April 15, 2015 to file their 2011 return.
Taxpayers who fail to file a return in any given year are not always missing a good thing. Failing to file can also lead to the IRS hitting you with penalties and interest for back taxes further down the road. The penalties and interest can quickly add up to and surpass the original tax liability. If this is the case, taxpayers have options for resolving tax debt through settlement offers and workouts.
A friendly warning to those who owe back taxes: do not fall for the television commercials by settlement companies. The commercials make it seem as though anyone can resolve a massive tax liability for pennies on the dollar – as long as you pay the company their upfront fee, of course. In most cases, these settlement companies make promises they simply cannot keep.
The tax settlement “professionals” are not tax attorneys, which is who you should have on your side. It is an important distinction, because settling with the IRS is not an easy process.