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Overdue Taxes and the Internal Revenue Service

Federal law requires individuals to file a tax return every year they earn taxable or reportable income. When taxes are not paid in full the IRS applies penalties and interest. Penalties and interest are compounded daily, so the amount owed continually increases.

If you want to bring your tax record current, consider the following:

Filing Requirement.
If you had income below the filing requirement or no taxable income, you might not be required to file a tax return. IRS Publication 17, Individual Income Tax Guide, contains information on filing requirements.

Reportable Income.
Not all income is taxable. Wages, tips, Social Security, and self employment income are taxable. SSI benefits, state aid, Medicare, Medicaid, veterans’ benefits, and food stamps are nontaxable income.

Get Help From an Accountant.
Tax laws are complicated. To get the best possible outcome with a minimum amount of frustration, work with an accountant who knows the laws and language of the IRS system.

Explore Options.
If you file a late return or owe taxes due to an extreme health condition, you can ask for an extension or a tax break. On the front of each tax return, attach a letter explaining when you were diagnosed HIV+ and that symptoms prevented you from filing on time. If your doctor issued you a letter declaring you terminally ill, include it with your own letter.