One of the reasons why many people do not file their tax returns is because they cannot pay the amount they owe. Even if a taxpayer cannot pay their tax liability in full, they still need to file a tax return. The more paid before the April 15th deadline, the less penalties and interest charged to the balance, by avoiding the late-filing penalty.
There is little time left to file taxes and those who have yet to file should e-file their returns. If a taxpayer owes a tax debt, they can pay the amount with an IRS debt payment plan. Depending on a taxpayer's financial situation, the IRS will deem the taxpayer Currently Not Collectible. However, if a taxpayer ignores their tax debt and all IRS communications, the IRS can place a lien or a levy to collect the unpaid taxes.
Tax avoidance can lead to more trouble than it's worth. At the end, taxpayers who ignore their taxes, usually pay more overall. The IRS charges separate penalties for non-compliance, along with interest, on any tax amount. Therefore, the later the amount is paid, the more that will need to be paid.
The IRS has many debt payment plans depending on the various financial capabilities of a taxpayer. From those who cannot pay any amount of tax debt to those who can pay it in full, there is a resolution for everyone.
Facing the IRS with the right information and knowledge of your rights is the best way to move forward with a tax debt. There are rules and regulations the IRS must follow and if a taxpayer follows those rules to reduce their tax debt, or get an extension of time and/or reduce penalties, they can expect favorable results.
Labels: Back Taxes, IRS, IRS Extension, Tax Filing, Taxpayers