Q a: Common Irs Tax Penalties

By Manuel Davis Jr

There are many common IRS tax penalties that you should familiarize yourself with. Hopefully you will never have to pay a single penalty or cent of interest to the IRS; however, this is unfortunately not the case for many people. There are many questions and answers that surround IRS tax penalties. Here are the answers to some of the most common questions:

What is the penalty for not filing a tax return?

Believe it or not, some people think it is okay to not file a return. Of course, they are wrong. If you cannot complete your return on time and do not request an extension you are going to be assessed a penalty of five percent of your tax liability for five months. As you can imagine, this penalty can quickly add up.

What is the penalty for not paying taxes?

If you do not pay your taxes on time you will be assessed a penalty of 0.5 percent of your liability per month. The total cannot exceed 25 percent. If you also have to pay the failure to file penalty this one does not apply to you for the first five months. Instead, you will start paying this penalty in the sixth month.

Is there any way to avoid paying these IRS tax penalties?

There are some things you can do to better your situation. For example, if you can show that you did not file your return due to an extreme hardship the penalties may be waived. Remember, though, the IRS will want to see a good reason. They cannot abate every penalty. If you are interested in penalty abatement it makes good sense to contact and hire a tax professional with experience in this area.

What if I have filed for bankruptcy?

In many cases, those who have filed for bankruptcy may be able to have their IRS tax penalties abated. It is important to note that bankruptcy courts can either allow penalties to be imposed or wipe them out entirely. They do not have the power to reduce any IRS tax penalty.

Should I hire a tax professional, such as an attorney, to help me with my problem?

There is no denying that tax laws are complicated. On top of this, they change on a yearly basis. This alone is reason enough to hire a tax professional. If you are interested in bettering your situation, while cutting out a lot of stress, you should consider hiring a tax attorney or other experienced professional. By doing so you will be able to ask questions and receive accurate answers. On top of this, your tax professional can communicate on your behalf with the IRS to ensure the best possible outcome.

These are some of the more common questions and answers surrounding IRS tax penalties. If you always file and pay on time you will never have to worry about penalties being imposed by the IRS. If you run into trouble that you cannot solve on your own, consider hiring a tax professional to show you the way.

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