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IRS tax filing deadline

Missed The April 18, 2018 Tax Deadline And Owe Tax?

File by June 14th to avoid higher late-filing penalty.

Taxpayers who owe tax and file their federal income tax return more than 60 days after the deadline will usually face a higher late-filing penalty.

Ordinarily, the late-filing penalty, also known as the failure-to-file penalty, [IRC §6651(a)(1)] is assessed when a taxpayer fails to file a tax return or request an extension by the due date. This penalty, which only applies if there is unpaid tax, is usually 5% for each month or part of a month that a tax return is late.

But if a tax return is filed more than 60 days after the April due date — or more than 60 days after the October due date if an extension was obtained — the minimum penalty is either $210 or 100% of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

The late-filing penalty will stop accruing once the taxpayer files a 2017 income tax return which should be done no later than Thursday, June 14, 2018.

If You Filed An Extension …

This late filing penalty will not apply as long as you file your 2017 individual income tax return by October 15, 2018.

If You File The Tax Return Late And It Shows An Overpayment …

This late filing penalty will not apply but keep in mind that if you wait more than two years to file the tax return, you will look your right to secure the refund.

Late Payment Penalty Still Applies

An extension to file is not an extension to pay. All 2017 individual income taxes are due by April 18, 2018. The late-payment penalty, also known as the failure-to-pay penalty, [IRC §§6651(a)(2) and 6651(a)(3)] is usually ½ of 1% of the unpaid tax for each month or part of a month the payment is late. Interest, currently at the rate of 5% per year, compounded daily, also applies to any payment made after the original April 18, 2018 deadline. By at least paying what you can with your tax return filing or extension filing, you are reducing future late-payment penalty and interest charges.

After a return is filed, the IRS will figure the penalty and interest due and send a bill to the taxpayer. Normally, the taxpayer will then have 21 days to pay any amount due but if you cannot pay the amount in full, you should not ignore this as unresolved tax problems only get worse.

Penalty relief may be available

Taxpayers who have a history of filing and paying on time often qualify to have the late filing and payment penalties abated. A taxpayer usually qualifies for this relief if they haven’t been assessed penalties for the past three years and meet certain other requirements. Even if a taxpayer does not qualify for this special relief, they may still be able to have penalties reduced or eliminated if their failure to file or pay on time was due to reasonable cause and not willful neglect.

Payment options

Many taxpayers delay filing because they are unable to pay what they owe but in order to get into a payment plan, you must be in current filing compliance. Furthermore, a payment plan can only include those tax periods with outstanding balances from tax returns that you filed and you must promise not to file new tax returns with unpaid balances or else your payment plan will go into default.

Depending on how much you owe will drive how much verification information/documents that IRS requires to consider a payment plan.  If you owe more than $50,000 in taxes, the IRS will require full verification of your financial information.  Likewise, if you are self-employed, you can expect the IRS to look at your financial information.

For any taxpayers looking to settle their outstanding IRS liabilities with an Offer In Compromise, the IRS always requires full financial disclosure.

What Should You Do?

If you owe more in taxes than you can afford, you should work with the tax attorneys at Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles County (Long Beach) and elsewhere in California. Let us analyze your situation seek abatement of penalties and come up with the best payment/settlement options that are right for you

    Request A Case Evaluation Or Tax Resolution Development Plan

    Get a Tax Resolution Development Plan from us first before you attempt to deal with the IRS. There are several options for you to meet or connect with Board Certified Tax Attorney Jeffrey B. Kahn. Jeff will review your situation and go over your options and best strategy to resolve your tax problems. This is more than a mere consultation. You will get the strategy or plan to move forward to resolve your tax problems! Jeff’s office can set up a date and time that is convenient for you. By the end of your Tax Resolution Development Plan Session, if you desire to hire us to implement the strategy or plan, Jeff would quote you our fees and apply in full the session fee paid for the Tax Resolution Development Plan Session.

    Types Of Initial Sessions:

    Most Popular GoToMeeting Virtual Tax Development Resolution Plan Session
    Maximum Duration: 60 minutes - Session
    Fee: $375.00 (Credited if hired*)
    Requires a computer, laptop, tablet or mobile device compatible with GoToMeeting. Please allow up to a 10-minute window following the appointment time for us to start the meeting. How secure is GoToMeeting? Your sessions are completely private and secure. All of GoToMeetings solutions feature end-to-end Secure Sockets Layer (SSL) and 128-bit Advanced Encryption Standard (AES) encryption. No unencrypted information is ever stored on our system.

    Face Time or Standard Telephone Tax Development Resolution Plan Session
    Maximum Duration: 60 minutes - Session
    Fee: $350.00 (Credited if hired*)
    Face Time requires an Apple device. Please allow up to a 10-minute window following the appointment time for us to get in contact with you. If you are located outside the U.S. please call us at the appointed time.

    Standard Fee Face-To-Face Tax Development Resolution Plan Session
    Maximum Duration: 60 minutes - Session
    Fee: $600.00 (Credited if hired*)
    Session is held at any of our offices or any other location you designate such as your financial adviser’s office or your accountant’s office, your place of business or your residence.

    Jeff’s office can take your credit card information to charge the session fee which secures your session.

    * The session fee is non-refundable and any allotted duration of time unused is not refunded; however, the full session fee will be applied as a credit toward future service if you choose to engage our firm.