Penalties
The IRS has a handful of penalties that they charge, but the two most common the IRS will consider waiving are the Failure-to-File and Failure-to-Pay Penalties, provided you meet the qualifications. Both are calculated as a percentage of the unpaid tax. The IRS charges the Failure-to-File Penalty for every month or part of a month that your return is late but it is capped after five months. Meanwhile, the Failure-to-Pay Penalty continues to accumulate for a much longer period of time. It can be assessed for as much as twenty-five percent of your original balance. It's also important to note that the Failure-to-Pay penalty begins accumulating after the original filing deadline regardless of any extensions. It's a common misconception, but the truth is an extension is only an extension to file, not to pay.
Interest
Interest is interest, no exceptions. The IRS continues to charge interest until your tax balance is fully resolved regardless of what caused the balance. There are no programs to remove or even reduce interest. The only time the IRS will adjust interest is in the rare circumstance that you can catch and prove the IRS made a calculation error. You should consider it a serious red flag if a practitioner implies that they can reduce or eliminate interest in any way. This is nothing more than a predatory sales tactic that representatives get away with by implying that the reduction or removal of penalties is extended to interest as well.
Penalties can get out of control fast, but most taxpayers qualify for first-time relief. Schedule your free consultation to find out how we can help you.
Additional Services
Installment Agreement
Payment Plan Program
Offer in Compromise
Hardship-based Settlement Program
Currently Not Collectible
Hardship Program
Revenue Officer
An individual agent assigned to enforce maximum collection
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