5 Ways the IRS Can Fine & Penalize Taxpayers
You’ve done the work and your tax return is prepared – now what? In the unfortunate circumstance that you owe the IRS tax, your project is not done until you’ve paid the piper.
Let’s examine separately the various fees the IRS may charge you:
⋅ Failure to Pay Estimated Payments
⋅ Failure to Pay Tax
⋅ Failure to File
⋅ Negligence and Fraud
There is a big difference between the date when you must file your return, and the date when the IRS expects their money. If you owe tax to the IRS, they expect to be paid on April 15th.
Even if you reside abroad and have until Jun 15 to file https://www.taxesforexpats.com/expat-tax-advice/filing-deadlines.html – if you owe any tax, interest starts to accrue from April 15th. You can request an extension to file until October 15, but interest will still accrue from April 15the.
However – interest charged by the IRS is fairly small on a monthly basis. The rate the IRS charges in 2017 is 4% annually (0.33% per month). In practice, if you owe the IRS $1000 and pay in October, you will only owe them $20 in interest.
Whole Story at TFX.Now, small numbers can add up over time. Floyd Mayweather, the world’s highest paid boxer, is 15 months overdue on his tax payment and owes the IRS 7.5% interest on top of what he was already scheduled to pay, $220 million; $16,500,000.