How To Request An IRS Waiver of Tax Penalties and Interest
- July 4, 2019
- Posted by: asal
- Category: Tax Relief
We’ve all heard about the scary tactics the IRS is capable of to get you to pay back taxes. We know the IRS has the legal ability to take your paycheck, assets, home, and anything else of value. But are you wondering what happens when you simply forget to file taxes? Do you think the IRS won’t know that you didn’t file taxes? You’re wrong. The IRS keeps tabs on all U.S. citizens because their goal is to collect any money you owe in back taxes. Therefore, if you fail to file taxes, you also usually fail to pay back taxes. It’s not the end of the world if you don’t file your taxes on time. However, there can be financial consequences for not filing on time. Keep reading for more information on what happens when you don’t file your taxes.
When it’s OK to not file taxes
Before we begin, it’s important to note that there are some cases where it’s OK to not file taxes. For example, if you owe $0 in back taxes or if you are owed a refund, you are not required to file taxes. Additionally, there is no penalty for filing late. However, if you are owed a refund and don’t file taxes within three years, the IRS will keep that refund. If you want your refund, you want to make sure to file taxes on time.
What is the difference between failing to file and failing to pay?
There is an important distinction between failure to file taxes and failure to pay. It will cost you more in penalties if you fail to file taxes. It’s important to note that filing taxes on time is the best thing you can do. If you don’t file your taxes on Tax Day before midnight, you need to file for an extension. Platinum Tax Defenders have a team of trained CPAs who can help you file a tax extension. If you file an extension, it only grants you more time to complete and submit your tax forms. However, you will still be expected to be pay back taxes on time. If you are unable to pay back taxes on time, tax relief is available. Platinum Tax Defenders also works with a team of experienced and trained tax attorneys who can help you find tax resolution.
What happens if you fail to file taxes?
If you fail to file your taxes on time, the IRS can and will charge you a late filing fee. The fee for late filing is currently 5 percent of the taxes you owe for each month past Tax Day that you fail to file. Failure to file penalties max out at 25 percent of the taxes you owe. It’s important to note that if you don’t file within 60 days of the April due date, the minimum penalty is $210, or 100 percent of your unpaid tax, whichever is less. There are some circumstances wherein the IRS may wave your late filing fees. There are some individuals who generally have more time to file and pay taxes, including:
– Victims of natural disasters
– Military service members and eligible support personnel in combat zones
– U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico
What happens if you fail to pay taxes?
It costs less to fail to pay your taxes than it does to fail to file taxes. For each month that you don’t pay back taxes, the IRS will charge 0.5 percent of your total tax bill as a penalty. Additionally, this penalty maxes out at 25 percent of your total back taxes bill. However, interest will continue to accrue on your back taxes. Your back tax debt begins accruing interest one day after your bill was due. Interest will be charged daily until your back taxes are paid in full. You can reduce the penalties and interest charged on not paying taxes by paying as much as possible on time. When you owe less, there is less extra you have to pay. If you’re seeking tax relief from back taxes owed, contact a tax relief professional.
First-Time Penalty Abatement
If you meet the requirements, you may be eligible to apply for first-time penalty abatement for relief from tax penalties. Below are the general requirements for first-time penalty abatement.
– The taxpayer wasn’t required to file a return, or has no tax penalties, for three years before applying.
– You have submitted all the necessary forms or filed an extension for more time to file.
– The taxpayer is arranging payment for any tax due
What is the 90 percent rule?
If you pay at least 90 percent of your balance due on Tax Day, the IRS will not penalize you. You will also not face IRS penalties if you paid at least 80 percent of your tax liability through paycheck withholdings.
In summary, what really happens when you don’t file or pay back taxes?
If you don’t file your taxes or file for an extension, you will accrue penalties. Penalties can be up to 25 percent of the back taxes you owe. For example, if you owe $5,000, your penalty charge will be $1,250. If you don’t file your taxes for more than 60 days, the penalty could double your tax bill. What’s worse? Don’t ignore the IRS if you owe taxes. The IRS can garnish your wages, place liens on your property, and put you in jail. If you are facing steep penalty fees and don’t know what your options are, call the experts at Platinum Tax Defenders. The team at Platinum Tax Defenders have been getting their clients out of back tax debt for years.
Get Help From A Tax Relief Professional. Call Platinum Tax Defenders today!
Hiring a tax relief specialist can get you a better deal when attempting to get tax relief from tax penalties. A tax attorney can help you determine which tax relief solution is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing tax penalties can leave you in bad financial shape. The IRS only wants to get what money you owe them in penalties. Often, they are willing to help you get tax relief from penalties, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid costly tax penalties. Call Platinum Tax Defenders for a free consultation today.