Did you know every tax year million of taxpayers leave unclaimed money for the Treasury?
There are some taxpayers who still file paper returns and did not request direct deposit. As a result, some errors are more likely to go undetected and some checks went uncashed. An estimated more than 2 million paper refunds, totalling $1.2 billion, went uncashed over a 2 year period. As reported, each year, almost 700,000 of uncashed refunds were under $50.00. For tax year 2018, there were over 70,000 paper refunds filed.
When taxpayers do not file their tax returns they could potentially leave money to the Treasury. Currently, the IRS and the Treasury are exploring all the avenues to get individuals to claim their stimulus payment because billion of dollars are still waiting to be paid. They are looking to partner with many organizations to try to get individuals to claim their stimulus payments. It is reported by the IRS that an estimated 11,000,000 taxpayers do not file their tax return each tax year period. Many of them have refunds unclaimed left for the Treasury. Those refunds could not be claimed after 3 years, except under special exceptions.
It is important to file your returns for several reasons:
- You need at least 2 years of tax returns for real estate transactions.
- You need your tax return to file for student loan.
- You might need proof of tax filing compliance for transactions with different government entities: local, state, and federal.
- You need to be in tax compliance for the past 6 years to obtain an abatement, an installment agreement, an offer in compromise from the Internal Revenue Service.
- You might need your tax return to apply for a loan.
- and so on…
Tax Filling Obligation.
Be proactive when it comes to your tax return. It is advised to file your return even when you might not owe or do not need the refund because you never know when you would need proof of tax filing compliance or income. Do not wait until a proof tax compliance or income is needed. It might cost you much more, and further, you might not be able to get it a the time needed.
Unfortunately, many taxpayers found out during the pandemic when they needed to apply for the Paycheck Protection Program Loan (PPP) that their tax returns were either not filed or filed incorrectly. Consequently, they are ineligible for the loan or have received a very low amount of fund.
Do not act on the advice of non tax professionals. Every taxpayer’s situation is different. Most tax professionals offer free initial consultation.
Do you know that you could reduce your tax liability by proper tax planning strategy as individual or business owner?
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