What Happens If You Pay The IRS Late?
Every U.S. citizen is required to file a tax return every year if he or she has earned money that year. Based on the filing, it is determined whether the individual needs to pay additional taxes or whether the individual can expect a refund. All tax-related matters are handled by the Internal Revenue Service (IRS).
If you need to pay the IRS and you are not doing this on time, some ramifications can affect you. It all starts with a small penalty and accrued interest added to the amount that you owe the IRS, but this becomes a large penalty if you still decide to not pay.
The interest on the open amount is 5% per month. So, in case you owe the IRS $100, you will be charged $0.50 a month for paying your taxes late. In addition, the IRS is penalizing you in with failure-to-pay penalties. They can vary between 0.5% and 25% of the unpaid balance.
Make Payment Arrangements
The IRS offers you to make payment arrangements to pay your taxes. However, if you fail to make them, the IRS is legally allowed to seize your property or even take your wages or the money you have in your bank account to pay back your taxes.
In serious cases, you can even end up in jail. The maximum sentence is five years for committing tax evasion. The IRS does not have the intention to put American citizens behind bars. They only want to make sure that are getting the money you owe them.
So, to avoid paying any accrued interest or penalties, make sure you file your taxes on time and pay the taxes to the IRS. You can make arrangements with the IRS and you can even ask for postponing the payment. As long as you communicate with them, they can find a solution for you. Contact us for more information.