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What Should I Do If I Missed the Extended Tax Deadline?

If you waited until this fall to deal with your taxes and missed the October 15 extended filing deadline, don’t wait any longer to send in a return. Unless you are due a refund, the IRS will assess fines for not filing a tax form in addition to fines for any unpaid taxes. While you might not be able to pay all the taxes you owe right away, you can avoid some penalties and interest by at least filing your tax form. 

How to File after October 15 

It’s too late to file electronically, but you can go to the IRS website and print off a paper form. Complete and mail the form as soon as possible.

If you had a hardship or reasonable cause that resulted in your late filing, you might not owe a penalty. Valid reasons include a fire or death in your immediate family. Contact the IRS to discuss your hardship and be prepared to provide documentation, such as hospital or court records. 

When sending in your late return, pay as much of your tax bill as possible. Every little bit counts, as the IRS assesses late fees and interest on any portion of an unpaid balance. It’s best to notify the IRS that you cannot pay your full bill. If you have the ability to pay the bill in installments over the next several months, then consider filing a Form 9465, Installment Agreement Request, with your late tax return.

If you cannot pay any of your tax bill, you should still file a return and notify the IRS. You might be eligible for various payment plans or even a temporary delay in collection.

Penalties for Late Filing and Payment

Based on the penalty amounts, the IRS seems to place more weight on the timely filing of your return. The failure-to-file penalty is generally 5% of an unpaid tax for each month the return is late, up to a maximum of 25% of the unpaid tax. Then the IRS charges interest on the unpaid balance, which includes the unpaid tax, penalty, and any interest already accrued. The sooner you file your late return, the better.

Comparatively, the failure-to-pay penalty is 0.5% of the unpaid tax per month, up to a maximum of 25%. Again, interest also accrues on the unpaid balance.

Note, the October 15 extension deadline applies only to the filing of a return. Tax payments were due, whether accompanied by a completed return or not, by July 15, 2020. The IRS will compute failure-to-pay penalties based on this date, not the extension date or the date you file a late return. 

Further Relief Due to Pandemic

The IRS is attempting to be more reasonable and forgiving in 2020. In early November, the tax bureau announced a new Taxpayer Relief Initiative that includes a number of measures designed to help taxpayers who need more time or simply cannot pay their 2019 bill. To be eligible, taxpayers should have filed a 2019 return. Here are a few highlights: 

  • The terms of a short-term payment plan have been extended from 120 days to 180 days.
  • Individuals who owe less than $250,000 might be able to set up installment agreements without providing verification of their financial status if their proposed monthly payment amount is deemed sufficient.
  • Individuals who only owe 2019 taxes and have an unpaid balance of less than $250,000 may qualify to set up an installment agreement without notice of a federal tax lien.
  • The agency is highlighting its first-time abatement relief program and may waive failure-to-file and failure-to-pay penalties for taxpayers who have otherwise paid and filed taxes on a timely basis.

Have Questions? Call the Experienced Tax Attorneys at Wiggam & Geer

If you missed the October 15 tax extension deadline and haven’t filed or paid your taxes, the experienced attorneys at Wiggam & Geer can help you evaluate your options and negotiate payment plans. Contact metro Atlanta’s top tax and bankruptcy attorneys by clicking here or giving us a call at (404) 609-1300.