{"id":2398,"date":"2023-09-18T00:13:56","date_gmt":"2023-09-18T00:13:56","guid":{"rendered":"https:\/\/taxreliefprofessional.com\/?p=2398"},"modified":"2023-09-27T01:47:27","modified_gmt":"2023-09-27T01:47:27","slug":"the-penalties-of-paying-your-taxes-late","status":"publish","type":"post","link":"https:\/\/taxreliefprofessional.com\/tax-penalties\/the-penalties-of-paying-your-taxes-late","title":{"rendered":"The Penalties of Paying Your Taxes Late"},"content":{"rendered":"\n
Problems that arise with taxpayers are so numerous that the IRS publishes a yearly Data Book<\/a>. Page 59 of the 2021 report shows the result of not filing taxes on time as a net assessment of $18,544,481 in taxes, penalties, and interest.<\/p>\n\n\n\n That same year the IRS accepted 15,154 offers in compromise, filed 212,251 liens, made 96 seizures, and entered into 2,361,646 installment agreements. Paying your taxes late can result in harsh penalties, but there are ways to avoid them.<\/p>\n\n\n\n Learn more about tax problems, penalties, and how to obtain relief in this guide.<\/p>\n\n\n\n The IRS may assess a penalty<\/a> if you fail to meet your tax obligation. The kinds of taxes you owe may impact how severe that penalty is.<\/p>\n\n\n\n The IRS will send a notification letter explaining the penalty amount and reason. IRS notices include the following:<\/p>\n\n\n\n The IRS charges interest on penalties and continues to assess them until you pay the balance in full.<\/p>\n\n\n\n The IRS sets quarterly interest rates for the balance due on taxes. The rates vary depending on the interest category and quarter of the year. During 2022 interest rates<\/a> are listed in order of 1st, 2nd, 3rd, and 4th quarters: <\/p>\n\n\n\n August 15, 2022, IRS notice IR-2022-150 announces interest rates for individuals is 6% per year, compounding daily, on overpayments and underpayments. This is an increase from 5% for the quarter that began July 1st.<\/p>\n\n\n\n The IRS makes quarterly adjustments to individual taxpayer rates. It is the Federal short-term rate plus 3% points.<\/p>\n\n\n\n It has a trickle-down effect. You don’t get your taxes done; before you know it, the year passes. When the next tax filing day arrives, you don’t want to draw attention to your prior year’s failure to file, so you skip filing again. Why do people allow this to happen?<\/p>\n\n\n\n Some of these reasons may allow you to escape interest and penalties from the IRS. Others will delay your agony. The best action is to consult a professional to determine how to remedy the situation.<\/p>\n\n\n\n The IRS does not pursue tax evasion cases<\/a>. If caught, you will have to repay the taxes and penalties for tax fraud. You may also receive a sentencing of up to five years in prison.<\/p>\n\n\n\n There is a wide range of problems that cause late payment of taxes. Some of the most common issues<\/a> taxpayers face include the following:<\/p>\n\n\n\n Foreign Bank and Financial Accounts (FBAR)<\/a> is an annual report due on April 15th of every year. There are civil penalties, criminal penalties, or both that you may receive for failing to comply with reporting and recordkeeping requirements. <\/p>\n\n\n\n Late filing is not always a problem. You can file late without penalty if you owe nothing in taxes or the IRS owes you a refund. These are the only times you can file late without a penalty.<\/p>\n\n\n\n You may stab yourself if you are due a refund. If you don’t file a return requesting the refund within three years of the original tax date, the IRS gets to keep your money. If you file before the time frame expires, you get your refund but no interest.<\/p>\n\n\n\n The best action is to file your tax return on time every year. You must file before midnight on tax day (usually April 15th) or file an extension. Filing an extension does not relieve your obligation to pay your taxes by April 15th to avoid interest.<\/p>\n\n\n\n Filing late taxes means receiving an assessment for a late filing fee. The filing fee is a percentage of the tax you owe.<\/p>\n\n\n\n It accumulates each month beyond the tax day that you don’t file. This fee varies from year to year.<\/p>\n\n\n\n The penalty becomes more extensive if you file 60 or more days before the filing deadline. It can even exceed the amount of the original tax due.<\/p>\n\n\n\n There are penalties for not paying your taxes on time. Penalties are lower than the late filing fee but still account for a percentage of the taxes you owe. They are assessed every month until paid in full.<\/p>\n\n\n\n In addition to the penalty, interest accrues on your bill beginning the day after the tax due date. The interest rate is based on the federal short-term interest rate<\/a> plus an additional 3%. If the short-term rate is 2%, you will be paying 5% in interest.<\/p>\n\n\n\n You can avoid IRS penalties by providing accurate information on your returns, filing on time, and paying the amount due by the deadline. Paying your taxes late is costly.<\/p>\n\n\n\n If you owe the IRS money and can’t pay, tax relief is available. Tax Relief Professional can help you reach an agreement with the IRS. Call (877) 469-1651 or use our online form<\/a> to contact a tax relief expert today.<\/p>\n","protected":false},"excerpt":{"rendered":" Did you know that you can get penalties for paying your taxes late? Here’s everything you need to know about tax penalties and how to avoid them. Problems that arise with taxpayers are so numerous that the IRS publishes a yearly Data Book. Page 59 of the 2021 report shows the result of not filing taxes […]<\/p>\n","protected":false},"author":10,"featured_media":2399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[63],"tags":[60,62,58,59,61,27,17],"acf":[],"yoast_head":"\nIRS Penalties<\/h2>\n\n\n\n
\n
Quarterly Interest Rates<\/h2>\n\n\n\n
\n
What Causes Not Filing or Late Filing of Taxes?<\/h2>\n\n\n\n
\n
Reasons for Paying Your Taxes Late<\/h2>\n\n\n\n
\n
Late Filing Exceptions<\/h2>\n\n\n\n
Failing to File vs. Failing to Pay<\/h2>\n\n\n\n
Avoid Paying Penalties<\/h2>\n\n\n\n