April 15—An Important Day for Taxpayers

Every April 15, every American faces the deadline to file their annual federal income tax returns. While a good number would file theirs early in the year, there are those who wait until the last minute to perform their responsibilities. Though there are those who are simply procrastinating with their returns, others just can’t help it. People can go through difficult times in their lives, rendering them unable to file their tax returns on time. Unfortunately, failure to do so comes with serious consequences that could set a taxpayer back even further.

Failure to File vs. Failure to Pay

Failure to file means that you were unable to file your income tax return or get approved for a six-month extension by April 15. Under IRS rules, you will be dealt with a penalty of 5 percent of the unpaid taxes for each month you continue to postpone filing. The penalty will accrue every month until it reaches 25 percent, which is the cap for it.

On the other hand, failure to pay is when you file your tax return on time but did not pay the corresponding tax debt amount. In this case, the penalty is 0.5 percent of the taxes you owe per month. The cap for the penalty is also 25 percent.

If reasonable cause contributed to your inability to file or pay, which consequently placed you at odds with the IRS, an attorney with experience in tax laws would be able to represent you.

 

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