Penalties in the IRS arena can be very onerous. Penalties kick in when you don't file on time. Penalties also kick in when you don't pay on time. Interest kicks in when you don't pay on time. The penalty for not filing your tax return is five percent per month from the date the tax return is due, which is typically April fifteenth, up to a maximum of twenty-five percent. The penalty for not paying your tax is one half of one percent per month, up to a maximum of twenty-five percent. So, as you can see, if you had a ten-thousand-dollar tax bill that was due and you didn't file your return, your penalty could be as high as twenty-five hundred dollars. For not filing, the penalty for not paying could be as high as 250 dollars. The interest rate can also be very onerous. I believe right now the interest rate is about 4%, but it is compounded daily, so penalties and interest continue to accrue. I've seen situations where the total bill is twice what the tax bill was simply because the person didn't file on time and didn't pay on time. If you are having tax problems and need some guidance, contact my office and we will help guide you through that process and see what solutions we can come up with for you and help you get those solutions implemented.
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Video instructions and help with filling out and completing Which Form 2350 Penalties
