The IRS typically sends Tax Payers a notice if they have failed to file taxes by a certain date. Failure to file can be due to several reasons, including illnesses or losses of employment. For example, in case of unemployment the taxpayer needs to submit specific forms and supporting documentation as required by the IRS before they can receive unemployment benefits. If this timeline is missed and the IRS determines that there is a willful neglect on behalf of the taxpayer, penalties may apply to them. This article will go through some ways that you can avoid these penalties when filing your taxes on time! Certain cases like extended illness or extreme circumstances, such as fires are understandable exceptions for why taxpayers may not be able to meet their deadlines for filing. The IRS allows property owners/businesses to extend up to three times the time they normally would have to file (according to the IRS). The reason is that many taxpayers may be unable to file because of circumstances beyond their control such as death of a family member, illness or extreme circumstances. The IRS does not allow late filing for any reason. The federal government has very few exceptions for filing taxes late or failing to do so at all. Even if a taxpayer can provide appropriate documentation proving why they were unable to meet this deadline, there are still a number of penalties that may apply. These include: penalties for underpayments, failure to file and other factors. These penalties provide the IRS with an incentive to ensure that taxpayers file their taxes timely. These penalties are calculated based on the amount owed. For example, underpayments may result in a late filing fee of 35% or $350, while failure to file or non-filing may incur a penalty of 5% or $50 and each monthly installment day that the payment is overdue. Late payment penalties start accruing the day after they become due and continue to accrue until they are paid in full. The IRS requires timely payment either by check or online. A late filing penalty of 35% will still be charged on any payment that is not paid by the date it is due. The above penalties are among the few you can expect to receive for failing to file your taxes by a certain time. In some cases, the IRS may have successfully contacted the taxpayer or have found out that they missed a deadline because of their failure to file via other means. However, if your attention was not brought to your situation in this way, there may be additional penalties beyond those listed above. If you are unable to file by a specific deadline, a number of IRS forms must be submitted in order for the IRS to determine whether or not there was willful neglect and what penalty should apply if applicable. As stated above, the IRS will be able to take into account any losses and circumstances that may have contributed to you being late. Regardless of the reason behind the late filing, there are still some steps that you can take to make sure that you meet your deadlines for filing your taxes.
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