Counsel Andy Weiner wrote an article for Forbes titled “Why Filing A Tax Return Is More Important Than Paying Tax.”
In the piece, Andy details the history of the US income tax system imposing separate obligations on taxpayers to file a tax return and pay the correct tax. These obligations are subject to separate penalties and the failure-to-file penalty is by far the more onerous.
As Andy explains, “A taxpayer who has not filed a return or paid the tax owed faces penalties each month of 5 percent of the net tax due and maximum penalties of 50 percent, while a taxpayer who has filed but not paid faces a penalty each month of 0.5 percent of the net tax due and a maximum penalty of 25 percent.”
Many individual taxpayers tend to assume that they can, or even should, prolong filing their tax returns if they anticipate being unable to pay the amount they owe. Andy stresses the importance of filing a tax return on time, even if you cannot pay the reported tax, given the failure-to-file penalty liability at stake and the unavailability of the reasonable cause exception to penalty liability for most taxpayers.
Andy states, “Filing a tax return timely or as timely as possible is the first step of tax compliance and minimizes penalty liability. While not as renown as death and taxes, that too is certain.”
You can read the full article on Forbes here.
Andy focuses his practice on tax controversies, both civil and criminal, at all stages of the administrative and judicial process. A former U.S. Department of Justice attorney, he has argued approximately 50 tax cases in the U.S. courts of appeals. He is a fellow of the American College of Tax Counsel and a frequent writer and speaker on tax issues.
