Should You Pay Your Taxes This Year? Most Definitely!

March 2025

The title to last month’s article was…

TAXES 2025 - CONFUSION, WISHFUL THINKING, WHAT’S REAL & WHEN?

Lots of Conversation, Speculation, Misinterpretation

The same title is equally appropriate today…in answer to the questions we are receiving:

· Is the IRS closing?

· Do I need to file taxes this year?

President Trump’s administration has initiated layoffs of about 7,000 IRS employees. Media reports highlight that many of the affected employees have been in enforcement roles. As indicated above, this news has triggered a reaction by some taxpayers as an opportunity to opt out of filing a tax return in 2025.

Don’t even consider it! And here are the A, B, Cs of why not:

A: Yes, President Trump has been vocal in his “lack of enthusiasm” for the IRS. That said, abolishing the agency is a matter that only Congressional action may address…not by a Presidential Executive Order. So, in the foreseeable future there is no indication that eliminating the IRS is likely to happen.

B: Funding the U.S. government is largely via taxpayer dollars. Regardless the ultimate fate of the IRS…change in name, structure or replacement by another entity…this revenue stream may sometimes be legislatively compromised but never abandoned. That means the requirement for taxpayer compliance will not disappear and an action today to ignore filing runs the very real risk of future retribution.

C: If you owe taxes and fail to file, penalties can be severe. Consider the following:

· Even in light of reductions in force, enforcement will remain a priority with the IRS.
· Unpaid taxes can result in a tax lien against your assets, seizure of bank accounts and garnishment of your wages.
· Failure to File Penalty – 5% of the unpaid tax amount per month, up to 25% of what you owe.
· Failure to Pay Penalty – 0.5% of unpaid taxes per month, likewise up to 25% of your tax debt.
· Interest on Unpaid Taxes – Compounds daily, rapidly accelerating your tax liability.

What’s a taxpayer to do? Engage in a simple 3-step proven compliance process.

1. File your tax return within the required timeframe.
2. If you owe and can pay your taxes do so promptly.
3. If you owe and cannot pay in full, explore payment plans and options with the IRS before the agency initiates punitive actions.

The above presentation is meant as an overview only.
Give us a call and we’ll quickly help you with questions.