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Tips for Filing Delinquent Taxes

Filing your tax return is not the only thing you have to do. You also have to pay any money that is owed to the IRS by a certain time. If you fail to do so, you’ll be subjected to serious penalties and fees. In some cases, the IRS can garnish your wages and implement tax liens and levies. The good news is that there are ways to file your delinquent taxes and avoid this. Here are some tips for when you file your delinquent taxes. 

Confirm the IRS Didn’t Make a Mistake

If you can’t afford to pay your filing penalties, interest, and fees, the IRS will waive them if they were caused by certain errors made by the agency. For example: If you filed your tax return and paid the right amount of money but the IRS never received it and you were assessed a penalty for failure to file, that penalty will be waived if you can show that you filed your return as soon as possible. If the IRS assessed a penalty for failure to pay but the problem was on their end because of a delay in processing, that penalty will also be waived.

Pay Before Interest Begins to Accrue

The IRS will automatically place a "Failure to Pay" notice on your filed and processed tax return. If you file delinquent taxes, you must provide the required payment for each outstanding balance listed on that notice or penalty and interest charges will accrue daily from the original due date of your return until the balance is paid in full. Once this payment is made, the IRS will lift the Failure to Pay notice so your next tax return can be processed normally.

Payment Plans Are Available

If you cannot pay off the full amount at once, that's okay. The IRS offers payment plans so you can gradually pay your balance over time. The payment plan can be set up to meet your financial needs and it will stop the penalty and interest charges from accruing while you make the payments.

Can’t Pay At All? There Are Options

If you cannot pay at all, the IRS has an option for that, too. You can file your delinquent taxes and request a “currently not collectible” status so you won't have to worry about paying anything at all for the time being. Your tax debt will go into suspension while your request is processed, but once it's okay to start collecting again, the IRS can take money from your paycheck or bank account to pay for your taxes. For more information on how you can obtain this status, click here.

Have an Explanation for Underpayment

Lastly, when you file delinquent taxes, the IRS will also waive any underpayment penalties if you can show that the failure to pay was due to “reasonable cause” and not willful neglect. To see if you qualify for an underpayment waiver, read this article by nolo.com.

Penalties for filing delinquent taxes can be tough, but these tips will help you meet all of your delinquent tax obligations while avoiding harsh penalties. If you need more information on how to file delinquent taxes, R&G Brenner can walk you through the process. Schedule a free appointment with us now, and you'll be back on track in no time!

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