Procrastination in filing pending dues
  • March 15, 2016
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When it comes to filing taxes, many people tend to get stressed out, which often leads to procrastination. Taxpayers, however, are not the only ones to blame for such indecisions. The intricacies of the U.S. Tax Code is a cryptic language for most taxpayers, which is why many people are unable to file their taxes and have to bear various consequences including penalties. To validate the significance of filing taxes before the annual deadline (April 15), in this post, we discuss the penalties taxpayers have to pay for late filing and payment.

Penalties

The US citizens run the risk of facing heavy penalties or missing out on tax credits worth of thousands of dollars if they wait until the last minute to submit their tax forms. There are two types of penalties that apply if you fail to file or pay. The first one is the failure-to-file penalty, and the other is the failure-to-pay penalty.

1. Failure-to-file Penalty

The monthly penalty for late filing is typically 5 percent of the amount of unpaid taxes. The minimum late filing penalty is lesser of $135 or 100 percent of the unpaid taxes. It, however, does not exceed 25 percent of your unpaid taxes.

2. Failure-to-pay Penalty

The monthly penalty for late payment is 0.5 percent of your unpaid taxes. The penalty starts accruing the day the due date expires and applies on a pro-rata basis for each month during which the taxes remain unpaid. The maximum penalty may accumulate up to 25 percent of your unpaid taxes.

Note : If you are supposed to pay both the types of penalties in any given month, the maximum combined amount can be up to 5 percent.

Ways to Avoid Penalties

To avoid shelling out your hard-earned money as tax penalties, plan your tax payments well in advance. If you are too cash-strapped to do that, here are a few ways that can be handy to avoid penalties.

  • Request an extension – To avoid failure-to-pay penalty, request for an extension of time to file. You still have to pay the interest on the unpaid taxes post-April 15 every year.
  • Ask for a tax relief –  If you have a valid reason for not being able to file or pay your taxes, the IRS may waive your late filing or late payment penalty after checking your past payment history.

A Word of Advice

If you don’t owe any taxes to the IRS or are due a refund, and file late, you will not be penalized. On the other hand, if you have back taxes and still file or pay late, you need to pay penalties. Typically, the failure-to-file penalty is as high as ten times the failure-to-pay penalty, and therefore, it is advisable to file tax returns and pay as much as possible to avoid the late filing fee. You can also consult a reputed tax attorney, who can handle all types of IRS problems, and help you get peace of mind.

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Carla AtwalCarla Atwal
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Miguel AlvaradoMiguel Alvarado
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Lucy FoyLucy Foy
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Bradley RunyonBradley Runyon
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I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
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Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
R GR G
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
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