Elderly Man Refuses to File. What Now? My dad is in his nineties and refuses to file a 2018 tax return. He has investment income from numerous sources. What now?

[Hal_Al]

The IRS gets copies of the investment tax forms (1099-INT, 1099-Div, 1099-B).  If it adds up to enough to file, he will be hearing from the IRS. If he fails to respond (file a return), the IRS assumes their calculations are correct and will try to collect the tax and penalties.

!099-B's are particularly troublesome. The IRS will assume the gross proceeds from the stock/fund sale are taxable, not just the gain from the sale.

The filing requirement is $13,600, of income, not including social security,  for someone over 64.

There are both  late filing and late payment penalties of 5% of the tax owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%, each, in addition to the failure to file penalty.

See <a rel="nofollow" target="_blank" href="https://www.irs.gov/irm/part20/irm_20-001-002r">https://www.irs.gov/irm/part20/irm_20-001-002r</a>

[Opus 17]

25% after the first 5 months then 1-2% per month after that.  

The IRS will get their money one way or another.  It may take a few years before they actually seize his bank and investment accounts but they can do that.   At the end, his executor will have to file the tax returns and pay the penalties when he dies, before any of the estate can be paid to the heirs.  

[epigeal987]

Thanks Hal_Al and Opus 17. I think I'll snail-mail him your comments in extra large font

[Opus 17]

I don't think it's 5% for each failure to file and failure to pay.  If I recall correctly, the failure to file penalty is 5% of the amount owed per month, for the first 5 months, then 0.5% per month after that.  The failure to pay penalty is 0.5% per month, except that no failure to pay penalty is assessed in any month where the 5% failure to file penalty is assessed.

So the net penalty is 5% per month for the first 5 months, then 1% per month after that.

Plus, there is interest owed on the amount of tax due AND on the penalties, at a rate of about 0.5% per month, so the net result is something like 28% after 5 months, growing an additional 2% per month after that.  (The interest will eventually overwhelm the penalties.)

And then if he won't file 2019 either, that sets up a whole separate penalty and interest calculation.  And so on.

[Critter · Accepted solution]

People can get stubborn as they age and lose control over things ... sadly this is where family needs to step in and get this person the help they need... consult an elder attorney in your area for suggestions. 

[fanfare]

Tell your father you'll take care of all the paperwork and fill out the tax return.

If you e-File, he doesn't have to sign anything.

He will have to write the check if tax is due, LOL.

[Opus 17]

I don’t recommend filing a return without the taxpayers permission unless you have a durable power of attorney.  

[Critter]

Which is where an elder attorney would be needed ... seek professional guidance for this and all the other matters that you need to deal with.

[fanfare]

obviously, my answer expects consent of the parent

[epigeal987]

Thanks. I think you're all correct...plus I need his assistance identifying all his brokerage accounts