The 2019 tax filing season has come to a close. If you have not yet filed your 2019 Federal and/or State tax returns or have filed but cannot pay your tax bill, you may be feeling hopeless and overwhelmed. If this is your situation, what should you do? How can we help?
The worst thing you can do is nothing. Failing to file your tax returns will result in a higher tax bill and make it harder to negotiate a solution. The IRS charges a failure-to-file penalty for every month that your tax return is late. The penalty is 5% of unpaid taxes for each month or part of a month that a tax return is late. In addition, the IRS also charges a failure-to-pay penalty of .5% of the tax owed after the due date. Your tax debt will grow rapidly as penalties and interest accrue, so it is imperative to file and pay what you can in a timely manner. The IRS will not work to settle tax issues with taxpayers who are not current on all of their tax filings. State tax authorities have similar penalties for non-filing and non-payment of taxes.
After your tax returns have been filed and if you still owe money to the IRS and state tax authorities, there are relief solutions you may be able to take advantage of such as an Installment Agreement or Offer in Compromise. In some cases, the IRS may be able to temporarily delay collections by reporting your account as currently not collectible. They may even be willing to waive penalties in certain circumstances. State tax authorities have similar relief solutions.
Navigating the solutions available to taxpayers and accomplishing the desired outcomes requires technical skill and a deep understanding of how the IRS and state tax authorities operate. Our team has experience working with the IRS and state tax authorities to achieve positive tax resolutions for our clients. If you have delinquent tax returns or unpaid tax debt, please do not hesitate to contact our office for a free initial consultation.
Jeffrey D. Cohen, Esq., C.P.A.