On June 7, 2019 the IRS released IR-2019-106 where The Service urges  taxpayers who owe tax and have not filed their 2018 return to act before Friday, June 14, before a larger penalty kicks in.

The failure-to-file penalty is assessed if there is unpaid tax and the taxpayer fails to file a tax return or request an extension by the April due date. This penalty is usually 5 percent of tax for the year that’s not paid by the original return due date. The penalty is charged for each month or part of a month that a tax return is late. But, if the return is more than 60 days late, there is a minimum penalty, either $210 or 100 percent of the unpaid tax, whichever is less.

Taxpayers who have filed and paid on time and have not been assessed any penalties for the past three years often qualify to have the penalty abated pursuant to First-Time Penalty Abatement
provisions.

A taxpayer who does not qualify for the first-time penalty relief may still qualify for penalty relief if their failure to file or pay on time was due to reasonable cause and not due to willful neglect.

The IRS also expanded the penalty waiver for those whose 2018 tax withholding and estimated tax payments fell short of their total tax liability for the year. The penalty will generally be waived for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

In addition to penalties, interest will be charged on any tax not paid by the regular April due date. For individual taxpayers it is the federal short-term interest rate plus 3 percentage points, currently 6 percent per year, compounded daily. Interest stops accruing as soon as the tax is paid in full. Interest cannot be abated.

For available IRS payment plans see our post Available IRS Payment Plans - Part I and Available IRS Payment Plans - Part II

Need Time To Pay Your IRS Taxes?  

   Contact the Tax Lawyers at 
Marini & Associates, P.A. 

 

 

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