Handling Interest Charges

You give yourself IRS problems if you settle your taxes late or don't pay at all. The unpaid tax is considered as borrowed money, so you are charged interest on your unpaid taxes, as required by the U.S. Congress. Not only that, you are also charged penalties for late payment.

You'll know you're punished by the IRS with the interest and penalties on your late/unpaid taxes. Furthermore, it doesn't take long for the tax bill to double or triple up. It's because interest is computed based on the entire amount, starting on the time the tax was due, and penalties are assessed and compounded on a daily basis.

You'll still be charged interest, regardless why you have unpaid/late taxes. Even if it's a mathematical error on your tax return, interest will increase for the amount of taxes not paid. Unless the IRS receives full payment, interest will not stop accumulating. Interest is posted every 3 months but compounded every day. It can go from 4-10% per year.

A detailed interest and penalty printout is available when requested. This printout will show: 1) lists of all your tax penalties and interest computations; 2) the dates, interest rates, any penalties assessed, and credits for payments or refunds; 3) interest and penalty charges on tax amounts; 4) penalties that were already applied; 5) an account summary showing amount due, which will include updated penalty and interest figures.

Our company can help you go over the documents to see if you do, in fact, need to pay the interest and penalties charged to you. Unless it was wrongly applied or is due to delays by the IRS, interest is normally never abated or cancelled. An Offer in Compromise may lessen or eliminate the interest, if you are eligible.