Tax Penalties

What are the penalties for not paying back taxes?

The late-payment penalty is 0.5% per month or partial month that a tax debt goes unpaid. The good news: This penalty can’t exceed 25% of the total taxes you owe. The bad news: The late-filing penalty is worse. It applies to the balance of your unpaid taxes as of the filing deadline, usually April 15.

The late-filing penalty is 5% for each month or partial month that your tax return is late, with a maximum penalty of 25% of owed taxes. The clock starts at your tax deadline, and the penalties add up, or accrue, until you file.

The more time that passes, the more you owe. If you don’t file within 60 days of the return due date (including extensions), you’ll owe $435, or a penalty equal to 100% of what you owe, whichever is less.

Interest is added to any unpaid tax, from the time the payment was due until the tax is paid. Interest is calculated for each day your balance is not paid in full, and is assessed on the amount of taxes due plus any late-filing or late-payment penalties.

Double whammy: If you file late (without requesting an extension) and you owe taxes, the maximum for the total associated penalties can be as high as 47.5% of the tax due—22.5% for late filing and 25% for late payment.

Can I file an extension if I owe back taxes?

Yes, but it won’t affect the taxes you owe. Asking for an extension to file your taxes means you’ll have six more months to prepare them. But if you owe money, the IRS immediately starts charging interest and potentially penalties after the filing deadline. Even if you can’t file on time, you should estimate what you owe and pay what you can right away.

taxpayers clinic penalties

Help With IRS Tax Payments

Free Consultation - Most taxpayers can seek a greatly reduced full pay settlement

The free consultation will allow a tax professional from Taxpayers Clinic to gain better insight to your case. From there they’ll review your case and the services involved to determine the price. The length of the process depends on the complexity of the case involved and can vary. The time also depends on how quickly you can gather and turn in the necessary documentation for the program you qualify for.

The first thing we can do is file a “Stay of Enforcement”, which blocks the IRS from seizing your bank account or assets like a home. This protects you instantly. 

We look at all the angles and figure out how to save you as much money as possible. It’s about what we know and who we know that can get you a favorable settlement. You may save tens of thousands of dollars and say goodbye to tax worries and hello to a fresh start.