Unpaid Taxes? Consider Paying or Negotiating



Failure to pay taxes before the filing deadline will result in tax debt. Beginning the day after the April 15th filing deadline, the IRS begins to charge penalty and interest on the unpaid taxes. Even if you have paid some amount of taxes and filed your tax return before the filing deadline, you will still be charged penalty and interest on the taxes that remain to be paid.

Typically, the IRS charges a 0.5 % penalty on the tax debt amount, and can charge up to a maximum of 25% penalty on the tax debt amount for a month month. A penalty is charged on tax debt each month.



Paying the entire tax debt in a single payment is the simplest method to resolve tax debt, but you can also pay your back taxes in installments or negotiate with the IRS to get a reduction in tax debt. To pay in installments or get a reduction in tax debt, you need to qualify for a tax debt payment plan such as Installment Agreement or Offer in Compromise respectively. 

If you have no ability to pay tax debt, you can try to achieve the status of Currently Not Collectible for your tax debt case. This will allow you to pay your tax debt only when your financial condition is more secure and allows either partial or full payment of tax debt.

Non-filing and paying of taxes must be avoided even if you have limited or no ability to pay your debt. In case of limited ability to pay your taxes, pay as much as you can before the filing deadline, and you may qualify for an Installment Agreement to pay the remaining balance. It will help you to substantially reduce IRS penalties and interest.


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