Unfiled Tax Returns & Taxes due

Federal and state laws generally require taxpayers to keep records of their income and expenses and to file tax returns.  This page provides a general overview of the tax returns and taxes that you may be required to file with the federal and state governments.

Not meeting your obligations as a taxpayer may subject you to criminal prosecution.  Depending upon your situation, the IRS and the Department of Revenue may also:

• Charge steep penalties and interest;
• Take your refund and apply it to your balance due;
• Deny refunds or credits that may be due to you (if you do not file the associated tax return within a particular period of time);
• File a Notice of Tax Lien;
• Take the funds in your bank, retirement, and investment accounts;
• Seize your property;
• Prepare tax returns on your behalf.  These tax returns are typically inaccurate; and/or
• Obtain court orders against you.

For individuals:

If your income is higher than a particular threshold, you may be required to file income tax returns with the IRS and the Department of Revenue each year.  Even if your income is less than the thresholds, it may be in your best interest to file income tax returns each year.  If you do not timely file an income tax return, you may be subject to penalties and interest.  Further, you may forfeit any refund that the government may owe to you!

For businesses:

If you operate a business, you are required to file income tax returns with the IRS and the Department of Revenue each year.  Depending upon what type of business you own, you may be required to file a Form 1120, 1120S, or 1065 with the IRS.  If you operate a sole proprietorship, you are required to attach a Schedule C with your individual income tax return.

Employment tax issues

Having employees is a privilege that comes with a cost.  Part of that cost is having to prepare and file employment tax returns, withhold tax from the employee, pay taxes, and make tax deposits on a predetermined schedule with the IRS and the Department of Revenue.  Your business may be required to file 10 or more tax returns with the federal government and the Commonwealth of Massachusetts each year and to make tax deposits with each payroll!

If you are involved with a business that has unpaid employment taxes, the IRS and the Department of Revenue can take steps to hold you personally liable for a portion or all of the unpaid tax, penalties, and interest!

Sales tax and use tax issues

If your business is required to charge, collect, and pay sales or use tax, it is required to file sales and use tax returns.  Your business may be required to file sales and use tax returns and to pay the associated sales and use tax to the Commonwealth of Massachusetts 12 times per year.  If you are involved with a business that has unpaid sales and use taxes, the Department of Revenue can take steps to hold you personally liable for a portion or all of the unpaid tax!