As the famous quote goes, the only things certain in this life are dat and taxes, given that there isn’t much beyond applying common sense which can help us to avoid death, it is taxes which give us the most concern. This is certainly true in my case and there is something about the IRS which strikes fear into my heart. It is for this reason that I always use Audit Defense for help with my taxes and if you check out the Audit Defense reviews you’ll understand just how good a job they do. The thing that concerns me most is the penalties which the IRS can impose, and here is what they are able to do if you fall foul of their requirements.
Firstly here is what the IRS say:
“If you do not file your return and pay your tax by the due date, you may have to pay a penalty. You may also have to pay a penalty if you substantially understate your tax, understate a reportable transaction, file an erroneous claim for refund or credit, or file a frivolous tax submission. If you provide fraudulent information on your return, you may have to pay a civil fraud penalty”
If you file your taxes returns late then you will be charged 5 percent for every month that the return is late, up to a maximum of 25 percent. If you have filed your tax returns later than 60 days after the due date then your minimum penalty will be $135 or it will be 100% of the tax on the return. This can be expensive so make sure that you file your tax return on the correct due date.
Late payment fees incurred will be 0.5% of unpaid taxes for every single month after the tax is due. You can apply for an automatic extension if you have paid at least 90% of your overall tax bill, in this case no penalties will be applied by the IRS.
Business Late Payment
If you own a business and you file your taxes late then you will be charged $89 per partner in the business, for every month that the tax return is late up to a maximum of 12 months. If the late filing can be shown to have a reasonable cause you will not be charged any penalties.
If there is any fraudulent behavior found by the IRS then they will charge you a penalty of 75 percent of the underpayment, this will be added to your tax bill and you will have to settle it all. If you have been found to file a frivolous return then you can be hit with a penalty of $5,000.
As you can see the IRS do not play around and this is why it is so important that you understand your obligations and follow the letter of the law.