It's April 15: Did You File Your Tax Return?
It’s April 15. Have you filed your tax return yet? Despite the adverse professional consequences that can result, some lawyers will delay long past today’s deadline for doing so, past experience strongly suggests.
“I had one case in which a tax lawyer didn’t file,” George Collins, a Chicago lawyer who often represents other attorneys in civil and disciplinary matters told the ABA Journal in an April 2002 article. “He was so busy filing other people’s returns that he didn’t file his own.” Even though the client didn’t owe much, he was prosecuted; the Internal Revenue Service tends to make an example of professionals who don’t comply with their tax obligations.
And, once a lawyer falls far enough behind, there’s likely to be a substantial price to pay, sooner or later. A former Philadelphia prosecutor who went into private practice was sentenced to 30 days in jail, followed by house arrest, for failing to file five years’ worth of federal tax returns, the Associated Press reported last week, in an article reprinted by New York Lawyer (reg. req.). Four New York lawyers got nabbed last year in misdemeanor cases that resulted from the state’s practice of matching professional licensing lists to tax returns filed by residents, an earlier ABAJournal.com post notes.
Experts urge lawyers who may have fallen behind to get a grip—and an accountant—and get the job done. Getting to the IRS first, by filing, even belatedly, and paying any tax due is a good first step toward persuading the agency to go easy on enforcement, the ABA Journal article suggests.
“Just please pay the damn taxes,” was the advice offered by William P. Smith III, general counsel of the State Bar of Georgia, to procrastinating practitioners, via the magazine article. “We’ve got enough business. We don’t need any more.”
Those who aren’t yet ready to file a full return can avoid penalties by filing an IRS Form 4868 (PDF) request for an automatic extension today, along with full payment of any tax due.
Meanwhile, for those who have the responsibility of preparing tax returns for others, tougher rules—and tougher penalties—may pose pitfalls for the unwary this year, according to the Oregonian and another ABAJournal.com post.
Preparers who don’t comply with the new, “more likely than not,” standard of certainty that tax information is correct can potentially be hit hard with fines of $5,000 or more, the newspaper notes.
