{"id":35336,"date":"2018-03-01T11:38:00","date_gmt":"2018-03-01T17:38:00","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=35336"},"modified":"2020-06-05T16:46:46","modified_gmt":"2020-06-05T21:46:46","slug":"file-return-even-cant-pay-taxes","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/file-return-even-cant-pay-taxes\/","title":{"rendered":"What to Do If I Owe Taxes and Can\u2019t Pay"},"content":{"rendered":"

Are you asking yourself “what if I owe taxes and can’t pay?” You\u2019re not alone. Each year, about one out of six people owe taxes when they file their tax return \u2013 and many of them can\u2019t pay right away.<\/p>\n

Many people ask themselves why they would file if I owe the IRS and can’t pay. After all, why create a tax bill? Because not filing only makes matters worse<\/strong>. Here\u2019s why.<\/p>\n

Four reasons you should file even if you can\u2019t pay<\/h2>\n

1. You\u2019ll owe more in the end, with penalties and interest.<\/h3>\n

If you don\u2019t file your return on time and pay the tax you owe, the IRS will charge you (or, \u201cassess\u201d) a failure to file penalty<\/a> that can add up to 25% more to your tax bill. On top of that, the IRS charges interest<\/a> on the taxes and the penalties you owe.<\/p>\n

Eventually, the IRS can collect what you owe \u2013 taxes, penalties, and interest \u2013 with tools like federal tax liens<\/a>, levies<\/a>, and wage garnishments<\/a>.<\/p>\n

2. The IRS can file a return for you.<\/h3>\n

The IRS can prepare a return for you, called a substitute for return<\/a>. But this return won\u2019t be good for you. The IRS will prepare it with income information from your bank, employers, and other payers \u2013 and you won\u2019t get any credits or deductions you\u2019re entitled to. So it\u2019s usually best to file your own return. Learn about unfiled tax returns.<\/a><\/p>\n

3. The IRS can hold future refunds.<\/h3>\n

You may be due refunds in future years. But not filing now can affect you for years to come. If you don\u2019t file a return now, the IRS can hold your refund in the future, meaning your money will just be sitting with the IRS. If you want to start receiving refunds again (or use your refund to pay off the taxes you owe), you\u2019ll need to file the back tax returns.<\/p>\n

4. Willful nonfiling can be a criminal offense.<\/h3>\n

The IRS doesn\u2019t prosecute many people each year for tax crimes. But there can be stiff penalties \u2013 including a 75% penalty for willingly and knowingly not filing a tax return. It\u2019s called the fraudulent failure to file penalty<\/a>. Remember: Notorious mobster, Al Capone wasn\u2019t prosecuted for any of his violent crimes or even for filing an incorrect return; he was prosecuted for not filing a return at all.<\/p>\n

The good news? The IRS will work with you if you owe.<\/h2>\n

Go ahead and file your return on time. The IRS offers several options for people who can\u2019t pay their taxes by the due date. Examples are extensions of time to pay<\/a>, monthly payment plans<\/a>, and even programs for people in financial hardship situations<\/a>.<\/p>\n

A tax professional can help you determine which option is best for you, and even request the payment plan for you from the IRS. Find out what unpaid taxes mean for you.<\/a><\/p>\n

Or, learn more about H&R Block\u2019s Tax Audit & Notice Services<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Are you asking yourself “what if I owe taxes and can’t pay?” You\u2019re not alone. Each year, about one out of six people owe taxes when they file their tax return \u2013 and many of them can\u2019t pay right away. Many people ask themselves why they would file if I owe the IRS and can’t […]<\/p>\n","protected":false},"author":605,"featured_media":3998,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,51],"tags":[],"class_list":["post-35336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-audits-and-tax-notices"],"acf":[],"yoast_head":"Why You Should File Your Return Even If You Can\u2019t Pay Your Taxes | H&R Block<\/title>\n<meta name=\"description\" content=\"Can\u2019t pay your taxes this year? You\u2019re not alone. 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