Paying IRS Tax Penalties and Interest

If you do not pay your taxes, you will more than likely face strict IRS tax penalties with interest and other fees attached.  However, these circumstances do not have to ruin your life. You can get help and information regarding paying back late IRS tax penalties and interest. If you knowingly submit a false tax return or you do not pay the full amount owed, this can be constituted as tax fraud. You can be sanctioned with fraud charges or even criminal charges. You will need an IRS tax professional who can help you resolve this problem.

Failure-to-file penalty information

A failure-to-file penalty is accessed when taxpayers do not file their income tax return by the due date. The penalty rate is 5% of the amount of the tax unpaid accessed each month. The rate cannot be more than 25% of the unpaid tax balance, but the amount due can be reduced if you experience both a failure-to file penalty along with a failure-to-pay penalty. If your return is more than sixty days past due, the IRS tax penalty will be not less than one hundred dollars or 100% of the unpaid tax balance. However, if you are experiencing financial difficulties in paying back your IRS tax penalties and interest, an IRS tax professional may be able to get the amount reduced or eliminated by showing justifiable cause for failing to file the taxes on time.

Differences between failure-to-file and failure-to-pay penalties

There is a big difference between the failure-to-file penalty and the failure-to-pay penalty. The failure-to-pay penalty is a penalty of ½ to 1% of your unpaid income tax liability. The interest accrues on a monthly basis and will continue to accrue if you do not do something about it. The failure-to-pay penalty cannot be more than 25% of the unpaid tax debt. Again, a tax professional can have this amount reduced or eliminated if they can prove you had a justifiable reason for not paying the late IRS tax penalties and interest.

There is an additional penalty for a frivolous return. This happens if you submit a tax return that does not contain enough information to process. This penalty is $500 and is added to any other applicable tax penalties. The IRS tax penalties can spell financial ruin. Your IRS tax professional is going to have the right tax knowledge and expertise to help you successfully work through this situation.

Accuracy-related penalty

An accuracy-related penalty is another penalty that can be filed against you. This is assessed to taxpayers who do not adhere to the tax laws or do not report income information accurately. The tax penalty rate is 20% and cannot exceed 20% of the unpaid income tax owed. IRS tax penalties and interest are difficult to understand. If you find yourself having trouble or have tax questions, then contact a tax professional as soon as possible.

Why you need a tax professional

If taxpayers do not file their income taxes in a timely and efficient manner, they are going to encounter IRS tax penalties. The combination of IRS penalties and interest can add quickly. If you are having trouble paying your taxes and you would like to work out a tax settlement with the IRS to pay back interest and penalties, you definitely want to get a tax professional to work with you.