The Internal Revenue Service has announced that they plan on assign tax compliance cases to Revenue Officers for those individuals that are high income earners and have failed to file income tax returns.
The Internal Service would have given taxpayers warnings via tax notices that remind individuals to file because they have a filing obligation. If these notices are ignored by the taxpayer, the case will then be assigned to an IRS Revenue Officer. An IRS Revenue Officer is a skilled tax collector that will probably make an unannounced visit to the Taxpayer's residence.
Although IRS Revenue Officers can be aggressive in the assessment and collection of un-filed and un-paid taxes, it is critical to file returns timely. Even if you cannot pay the tax due, it is recommended to file tax returns in a timely manner in order to prevent the assessment of the late filing penalty. Even though the IRS will assess late payment penalties and interest on the unpaid balances, the penalty rate for late payment is usually lower than the penalty rate for late filing of tax returns.
Furthermore, once a Revenue Officer is assigned, they could prepare a substitute for return on the taxpayer's behalf. This is even more problematic because the taxes due as a result of a substitute for return are usually higher than if the taxpayer prepares their own return voluntarily because the Service will not take into account the expenses and credits that the taxpayer is legally entitled to.
Finally, worst of all, the substitute for return balances cannot be discharged in bankruptcy because some circuits do not classify a substitute for return as a return for bankruptcy discharge purposes.
Shamim S. Akhavan, Esq.
15456 Ventura Blvd,
Sherman Oaks, CA 91403
Tel: (818) 650-0259
Fax: (818) 475-1936
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