by Fresh Start Tax | Apr 16, 2014 | Tax Help
Facts about Penalties for Filing and Paying Late
April 15 is the tax day deadline for most people.
If you’re due a refund there’s no penalty if you file a late tax return.
But if you owe taxes and you fail to file and pay on time, you’ll usually owe interest and penalties on the taxes you pay late.
Facts that you should know about these penalties.
1. If you file late and owe federal taxes, two penalties may apply.
a. The first is a failure-to-file penalty for late filing.
b. The second is a failure-to-pay penalty for paying late.
2. The failure-to-file penalty is usually much more than the failure-to-pay penalty.
In most cases, it’s 10 times more, so if you can’t pay what you owe by the due date, you should still file your tax return on time and pay as much as you can. You should try other options to pay, such as getting a loan or paying by credit card.
The IRS will work with you to help you resolve your tax debt.
3. The failure-to-file penalty is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late.
It will not exceed 25 percent of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty for late filing is the smaller of $135 or 100 percent of the unpaid tax.
5. The failure-to-pay penalty is generally 0.5 percent per month of your unpaid taxes.
It applies for each month or part of a month your taxes remain unpaid and starts accruing the day after taxes are due.
It can build up to as much as 25 percent of your unpaid taxes.
6. If the 5 percent failure-to-file penalty and the 0.5 percent failure-to-pay penalty both apply in any month, the maximum penalty amount charged for that month is 5 percent.
7. If you requested an extension of time to file your income tax return by the tax due date and paid at least 90 percent of the taxes you owe, you may not face a failure-to-pay penalty.
However, you must pay the remaining balance by the extended due date. You will owe interest on any taxes you pay after the April 15 due date.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show reasonable cause for not filing or paying on time.
If you have filed your tax return and need to have your penalties and interest abated call us today. you must meet the guidelines for reasonable cause. You can find those reasonable cause guidelines on our website.
by Fresh Start Tax | Apr 16, 2014 | Tax Help
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Owing Back Taxes
If you will money to the Internal Revenue Service and the Internal Revenue Service will take a current and documented financial statement.
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by Fresh Start Tax | Apr 16, 2014 | Tax Help
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Areas of Professional Tax Practice:
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- Payment Plans, Installment Agreements, Structured agreements
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by Fresh Start Tax | Apr 16, 2014 | Tax Help
We are an affordable local professional tax firm that specializes in IRS and state tax help.
We have practiced in South Florida since 1982 and are A+ rated by the Better Business Bureau.
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On staff are tax attorneys, tax lawyers, certified public accountants, enrolled agents and former IRS agents managers and tax instructors.
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If the Internal Revenue Service has sent you a bank or wage garnishment levy, upon receiving your current documented financial statement, we can usually get your bank or wage garnishment levy released and close your case off the IRS enforcement computer.
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by Fresh Start Tax | Apr 15, 2014 | Tax Help
The Internal Revenue Service has a policy statement for almost everything they do and the offer in compromise is no different.
Policy Statement 5-97 regarding the Offer in Compromise
Stay of collection—offer in compromise cases
Submission of an offer in compromise does not automatically stay collection of an account.
If there is any indication that the filing of an offer in compromise was solely for the purpose of delaying collection of the liability or that delay would jeopardize the Government’s interest, immediate steps should be taken to collect the unpaid liability.
However, if it is determined that the offer merits consideration and that the Government’s interests would not be jeopardized by delay, collection action will be withheld pending consideration of the offer in compromise.
IRS Policy Statement 5-100
Offers will be accepted
The Service will accept an offer in compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential.
An offer in compromise is a legitimate alternative to declaring a case currently not collectible or to a protracted installment agreement.
The goal is to achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the Government.
In cases where an offer in compromise appears to be a viable solution to a tax delinquency, the Service employee assigned the case will discuss the compromise alternative with the taxpayer and, when necessary, assist in preparing the required forms.
The taxpayer will be responsible for initiating the first specific proposal for compromise.
The success of the compromise program will be assured only if taxpayers make adequate compromise proposals consistent with their ability to pay and the Service makes prompt and reasonable decisions.
Taxpayers are expected to provide reasonable documentation to verify their ability to pay. The ultimate goal is a compromise which is in the best interest of both the taxpayer and the Service.
Acceptance of an adequate offer will also result in creating for the taxpayer an expectation of and a fresh start toward compliance with all future filing and payment requirements.
Does an IRS Offer in Compromise Stay the Collection, What you Need to Know
