File an IRS Extension Request or face IRS Penalties

If you do not file your tax return or automatic extension request by today you might face a failure-to-file penalty. If you do not pay by today, you could face a failure-to-pay penalty. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return TODAY on time and CALL THE IRS TODAY at 1-800-829-1040 to explore other payment options. Start by simply asking for a penalty free extension of time to pay. The IRS, believe it or not, will indeed work with you. Trust me on this. When calling always first ask the person you are speaking with to state or restate their IRS employee identification number. Also keep in mind that if the person on the other end of the phone is addressing you in a fashion that you believe to be unprofessional or disrespectful insist on speaking to a supervisor. These are some minimum rights you have as a tax payer. As I post this there is only a 7 minute wait time on hold. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will cap at 25 percent of your unpaid taxes.  Here are some other facts: 

• If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. 
• If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes. 
• If you timely filed a request for an extension of time to file and you paid at least 90 percent of your actual tax liability by the original due date, you will not be faced with a failure-to-pay penalty if the remaining balance is paid by the extended due date. 
• If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. 
• You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect. For more information on what constitutes 'reasonable cause' or 'willful neglect' contact me directly.

I pulled this information from Avoiding Penalties and the Tax Gap

John R. Dundon, EA - 720-234-1177 - jddundon@comcast.net - http://prep.1040.com/jd/ - Enrolled with the United States Department of Treasury to Practice before the IRS - Enrolled Agent # 85353. Under contract with the IRS as a Certified Individual Taxpayer Identification Number (ITIN) Acceptance Agent - I am a Federally Authorized Tax Practitioner (USC 31 Section 330 + IRC 7525a.3.A) regulated under US Treasury Cir. 230.