Have you been contacted by the IRS concerning a tax penalty you owe? Have you even filed your taxes yet? It might be time to get moving!
If you have not yet filed last year’s taxes or any previous year’s, you may be accruing a penalty, or possibly have a refund waiting for you. It is important that you complete these unfiled tax returns as soon as possible so you don’t continue to accumulate a penalty. If you don’t, you could end up paying a penalty as large as 25% of your taxes owed. Filing your taxes without payment will result in a failure-to-pay penalty: ½ of 1% of your unpaid taxes each month. The sooner you file your taxes, the lower your penalty will be.
The IRS can provide you with a tax transcript and let you know which years you have not filed, but were required to. You will also generally receive a notification in the mail, but it is not a good idea to wait for your notification to come before taking action, as it can sometimes take an extended period of time to arrive. You will continue to accrue a penalty during this time, no matter how long a notification takes to get to you.
So What Can I Do?
It is possible that you may qualify for a tax penalty abatement to receive relief for penalties accrued. If this is your first year having a tax penalty, you may qualify for a reduction in your penalty through the First Time Penalty Abatement policy. If you haven’t had any tax penalties for the previous 3 years before the tax year you received the penalty, there is chance you may qualify. If you do not qualify for the First Time Penalty Abatement, you may qualify for an IRS Tax payment plan or an Offer in Compromise.
This process can often prove daunting and can be very confusing. The tax professionals at Nationwide Tax Solutions are here to help. We have over 24 years of experience reducing IRS penalties. Once we gain an understanding of your circumstances, we will be able to guide you to your best options for tax penalty abatements.