The Penalties of Not Filing Your Taxes

You may think that what you do will be unnoticed by the IRS because of the millions of other taxpayers. You convince yourself that it does not matter even if you don't pay your taxes. You are not right, unfortunately, as the IRS will notice. What are the consequences for not filing your taxes? Where can you go for advise - can the IRS help?

You will probably believe that not filing for your taxes is a small thing but the government perceives this as stealing and considers it an offense. There are different levels of penalties depending on your tax status:

* Filing for taxes late
* Not filing for taxes at all
* Not paying taxes



The penalties for filing your taxes late are by far the easiest to deal with. The IRS tacks on a penalty of 5% per month. For instance, a 15% interest will be charged to you if you filed on June and it is supposed to be submitted on April 15.Your maximum penalty is 25%.

What should you do if April 15 is almost near, and you still did not file your tax return?

Should your circumstances call for an extension in filing for your taxes, you may call the IRS. You can process this request by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. An approved request grants you up to August 15, instead of April 15, to take care of your tax returns. If you need more time, you can use Form 2688. It is imperative that you file for an extension as doing otherwise automatically gives you the 5% interest.

Requesting for an extension, on the other hand, is not tantamount to saying that you have more time to pay for the taxes that you owe. The law requires that you should settle at least 90% of the total taxable income otherwise you will be given a monthly penalty of 0.5% This then brings us to the next type of penalty.

Certainly, it is more preferred not to pay the whole amount than not file at all. Let us use the example that you owe $5000. Paying only $1000 results to a mere $20 charge, which is 0.5% multiplied by $4000. Thus, it is important that you file and pay your taxes whatever way you can.

The IRS may make use of more severe measures should the agency see that you continue to be a delinquent tax payer. First, the penalty increases 1% a month. Then, the IRS may urge you to mortgage assets or file for a loan. Third, they can use more rigorous collection techniques like wage garnishment and levying bank accounts.

The IRS can really help you before your situation gets out of control. given. Installment plans, temporary delays and Offer in Compromise are yet other choices that can be tried out. For additional information, visit the IRS site. All these only reveal that the IRS, indeed, is nothing like the way they are portrayed to be.

Not even bothering to file your taxes gives you the most burdensome consequences. You will be charged 5% of the amount you owe, per month. The maximum penalty for this infraction, however, is 25%. Say you owe $5000 and have been five months late in filing. To calculate your penalty, you need to multiply 5000 by 25%. This tacks on another $1250 to your bill. In this situation, it is more difficult get IRS assistance.

The IRS may accomplish a return and mail the bills and fees to a tax payer who, over time, refuses to file. This option, on the other hand, forfeits the deductions he should have been entitled to.The IRS may press for criminal or civil charges should the above option prove to be futile. To refrain from reaching at these unfavorable situations, ask for the assistance of the IRS. There are always ways that you can arrange to pay what you owe without incurring serious consequences.