How To Address IRS Penalties and Interest

Do you owe back taxes or have not filed taxes for some time? IRS problems can be stressful. Interest and penalties are also accruing. Let our office help you solve this and other IRS problems you might have.

The IRS will add interest and penalties to a late tax return with a balance due and back taxes. You may also receive a penalty if you fail to file the correct tax form. Penalties are added automatically and are used as punishment to late taxpayers.

Penalties

• Accuracy. This penalty is 20% and is added to your bill if you understated your income on your return.
• Fraud ? seventy-five per cent for a fraudulently filed tax return
• Failure to File Penalty ? five per cent to twenty-five per cent every month for late filing
• Failure to Pay Penalty. If you failed to pay on time you will pay a quarter of a per cent to one per cent each month of the amount you failed to pay.
• Combined ? 5% every month for both late filing and payment

As you can see, these penalties can add a chunk of change to what you owe. Consider filing an extension if you require more time to prepare your return. Your Failure to File Penalty may be eliminated, or at least reduced.

It's important to note that if you have a refund coming and file late, there is no penalty charged since penalties are calculated from the balance due. Interest Facts

If your tax return is late and you need to pay money, you're considered to be borrowing the money from the country and interest will be added. Adjusted by formula each quarter and compounded every day, the interest rate is set by Congress. Interest can be as high as 4% to ten per cent a year. The balance you owe and whatever penalties are due is the basis for the interest calculation.

An IRS error can have interest removed from your tax bill. You may be successful if any of these circumstances occur:

• delays in the IRS.
• an Offer in Compromise will decrease your bill if determined that you won't be able to pay the tax and interest.
• tax and penalties were abated, so interest is cancelled.
• declaring bankruptcy, your last option.

Please feel free to contact us by email at contactus@getirshelp.com or by all means call us tollfree at (888) GETMISH 438-6474 We're here to help with all of your problems with the IRS! It's not your fault so call us now!

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