Tax Evasion: Isn't that how they got Capone?

July 22, 2010 4:36 PM

I did our taxes through TurboTax. I thought they transmitted correctly. They didn't. I just realized this. So are we going to jail for tax evasion?

I know you're not my whatever, I just want some sample anecdata to help me feel less panicked about this. So apparently there was some sort of goof-up where when I hit the send button, and it said "Yay! It's sent!", in fact, my returns didn't transmit. I didn't realize I had TurboTax hooked up to an email address that I rarely use, so I didn't notice the email from them until, oh, let's say mid to late May. And then I got busy/sort of forgot about it until, well, right now.

Have you ever forgotten to file your taxes? What happened to you when you did? Any advice?

posted by macadamiaranch to Work & Money (14 answers total)

You're filing late. They'll charge you penalties. Not a big deal.
posted by anti social order at 4:38 PM on July 22, 2010 [1 favorite]

Do you owe or are you getting a refund? Call the IRS, explain what happened, and it'll work out. The IRS isn't actually evil and doesn't want to throw you in jail, especially for an honest mistake. They've got bigger fish to fry. And if it's a refund? Even less of a big deal.
posted by elsietheeel at 4:40 PM on July 22, 2010

They will just charge you a penalty. The penalty wasn't even all that bad when I filed like a year late. If you are getting a refund, then they will just take the penalty/fee out of that. It's all good.
posted by AltReality at 4:51 PM on July 22, 2010

Call, explain, remedy. I think you'll find the IRS is actually eminently reasonable with people who want to fix an honest mistake.
posted by Emperor SnooKloze at 4:52 PM on July 22, 2010

Had the same problem with state taxes a few years ago and didn't realize it until I went and did taxes the NEXT year. I proactively sent a letter with a check for what I owed and told them to tell me what the extra penalty would be. This way they stop penalizing you from the date they receive your check instead of waiting several weeks and more $$$ to assess the penalty.
posted by thorny at 4:57 PM on July 22, 2010

It's fine. There are people who don't file for years and walk the streets, so nobody is going to jail (although I think you were kidding about that part).

Federal income tax penalties for those who file late are 5% of the amount owed, each month for up to five months, then a half percent if there is a remaining delinquent amount. If you didn't owe anything and were due a refund, there is no late filing penalty for federal. Check with your state tax board for that type of situation.
posted by cgomez at 4:59 PM on July 22, 2010

If you owe, your violation is in not filing for the automatic extension and paying what was due on April 15th. They will charge you penalties and interest. You could probably negotiate to pay interest only. IF they owe you, you will be ok.
posted by JohnnyGunn at 5:08 PM on July 22, 2010

Unless you've failed to file before, you've filed late in the last 3 years or you owe a huge amount you'll be charged a late fee usually like 1% of your owed money plus like a fifty dollar you're a bad tax payer fee. I know this cause we filed near the date only to find put we couldn't pay. It was literally no big deal but you need to make a good faith effort to file there are forms and parts of IRS website for nearly every situation.
posted by ExitPursuedByBear at 5:25 PM on July 22, 2010

Cgomez I just read your post i was only charged 1% interest for
My late payments.
posted by ExitPursuedByBear at 5:27 PM on July 22, 2010

If you are assessed a penalty that's high enough to make it worth fighting, it may help to write a letter explaining the mistake with turbo tax and requesting that the IRS abate the penalty due to the honest mistake on your part (point out that you acted in good faith and have no prior history of late filings if that's the case. Plus, attach a copy of the penalty notice to your response and mail the whole thing certified).
posted by MediaMer at 5:31 PM on July 22, 2010

§6651 US Tax Code: "to file any return required under authority of subchapter A of chapter 61 ... on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate..."

Again, this is referring to a failure to file and not merely paying late which would incur a far lesser penalty of 0.5% per month on the tax due plus a set late payment penalty. You may be able to appeal and argue that you made an effort in good faith to file, but I do not believe that is what falls into the "reasonable cause" out. As with all advice, IANYTA and this is based on what I've been taught and have studied, and not personal experience in the situation.
posted by cgomez at 5:43 PM on July 22, 2010

The people at the IRS are incredibly sweet. Call them! Some of us talk to them quite regularly!

You're in nooo way going to jail. Heh. Believe me.
posted by RJ Reynolds at 6:17 PM on July 22, 2010

If you were due a refund, I don't think you even get charged a penalty. This was the case a few years ago, at least.
posted by wending my way at 7:09 PM on July 22, 2010

I had a glitch with Turbotax myself this year. It was an obvious-looking mistake in retrospect so I duly received a letter saying 'send us supporting documents for income and withholding.' I phoned and talked to very helpful person (not even put on hold for very long) who sent me the forms to fill out to correct my filing.

This was an one-time income situation I didn't fully understand so I needed help to fill out the correction form and called about that. Then I spoke with two people, the first specialized in one part of the form, the second in another. The second was a little impatient because I interrupted her to clarify my question--which she had clearly understood exactly and immediately; I apologized, asked her to be patient with me and she then was.

So that whole thing is now in the mail. I smiled with you because I also had the immediate reaction "I'm too old to go to prison; I won't survive!!!" My son was very reassuring about this and urged me to go ahead and phone; he said nobody wanted to put me in jail for a mistake. He was right; they couldn't have been nicer.
posted by Anitanola at 7:51 PM on July 22, 2010