SubscribeThree types of penalties imposed by the IRS include penalties for late tax filing, penalties for not filing your taxes at all and penalties for non-payment of your taxes. The penalty will be less if it is due to late filing of taxes. In this case, you will be charged with a 5% extra monthly payment. But if you fail to pay this also then the percentage will increase. So, it is better to file the taxes as early as possible. In case you have got some genuine excuses then you can ask for some extension from the IRS. But the IRS must feel that the reason is good. For that, you must provide some supplementary evidence like documentary proofs. In order to apply for extension, you must fill the Form 4868. If you want more time then you must use the form 2688. Failure to file a request will result in a 5% penalty.
If you make a request, it does not mean that they are granting you extra time for paying the taxes. About 90% of the total tax you owe to the IRS must be settled. Otherwise you will have to pay a 0.5% penalty. If you do not have the full amount to be paid then you can pay a part of the tax. In this way the amount to be paid as the penalty can be reduced. If you delay the payment then you will have to pay more money as tax. So, pay the remaining amount as soon as possible. If you did not pay the tax for a long time and don’t take actions in response to the IRS notices and threats, then the IRS will be forced to take the next step like levying bank accounts, property attachment etc. If the IRS finds that you have cheated them then they may take stronger actions like imprisonment. If you have got any tax problems then contact IRS immediately and make an agreement for paying the tax. Different payment options are available to the taxpayer like installment plans, Offer in Compromise and much more.
Just know that even if you cannot pay the taxes owed for your tax return, it is still best for you to go ahead and file the return anyways because the consequences for not paying will be much less than not filing. If you are having trouble paying, you can always use the help of a tax professional and they can help you settle for less or setup a manageable payment plan for you.
Manuel Davis Jr is a Tax Negotiation Expert and writer for BackTaxeshelp.com
If you need help Filing Back Taxes please visit the site or call us at (800) 717-2797.
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