Tax Dictionary – Unfiled Business Tax Returns
If you haven’t filed your federal income tax return for this year or previous years, you may be subject to penalties and interest. Regardless of your reason for not filing a required return, file your tax return as soon as possible.
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If a business has unfiled tax returns, the IRS will require that all unfiled returns be filed. If you don’t file a required tax return by the due date, the IRS will charge a 5% per month penalty for failing to file and if there is a balance due, a .5% per month failure to pay penalty. Interest will also accrue on any unpaid balance from the day the return was due until the date it is paid in full. The IRS can also file a return for the business if no return is filed. The IRS prepares the return based on information it has from banks, financial institutions, other payers and based on prior returns that were filed.
If a refund is due, you must file the tax return within three years of the due date of the return or two years from the date the tax was paid, whichever is later, or you will lose the refund.
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