• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About Us

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • Newsworthy
  • You & Your Lawyer
  • Small Business
  • Family Law

File Your Tax Return Or Get An Extension?

By Cathy Moran

spotlightFiling a tax return does not focus a spotlight on you.

Really.

I regularly see clients who have not filed returns because they have some issue with the IRS.

They either have taxes that will be owed with the unfiled return, or taxes owed from earlier periods.

They think they are avoiding trouble by not filing.

Not so.

It seems that it takes weeks, or even months for returns to get entered in the system.

I have seen no evidence that collection action is triggered by filing a return even with a balance due.

Tax penalties coming and going

The IRS levies two separate penalties for non filers: a penalty for not filing the return and a separate penalty for not paying the tax.

Perhaps you can’t pay all you owe with the return, but why incur an avoidable penalty for not filing a timely return?

Tax penalties are not dischargeable in Chapter 7 until they are more than three years old. Contain the damage: file on time.

Further thoughts on why filing taxes sooner is better than later

Image courtesy of Johnarobb.

More from the Soapbox

  • 10 Things Every Attorney Should Know About Bankruptcy10 Things Every Attorney Should Know About Bankruptcy
  • Congress Considers Making Student Loans Dischargeable in BankruptcyCongress Considers Making Student Loans Dischargeable in Bankruptcy
  • Free Bankruptcy Advice:  5 Reasons Why I’m Not FreeFree Bankruptcy Advice: 5 Reasons Why I’m Not Free
  • Even The Rich & Famous File BankruptcyEven The Rich & Famous File Bankruptcy
  • Bankruptcy Alphabet:  W is for WaitBankruptcy Alphabet: W is for Wait

Filed Under: Taxes

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Comments

  1. Nickolas Seaver says

    January 14, 2012 at 12:36 pm

    Enjoyed every bit of your blog post.Really thank you! Will read on…

Coronavirus & Your Finances

About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

When Can I File Bankruptcy Again

You can file bankruptcy tomorrow, so long as you don't currently have a bankruptcy case pending. When you can get a discharge in that case is a different story. The Bankruptcy Code limits the frequency of getting a discharge, not the filing and completion of the bankruptcy case. My friend Gene Melchionne wrote … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700

Categories

All content copyright © Moran Law Group. All rights reserved.