Taxpayers who did not file their taxes by the tax filing deadline, and did not receive an extension, will need to pay a late-filing penalty starting April 16th. The IRS considers all taxes owed as a tax debt after the deadline and begins to charge penalties and interest on all taxes due.
Apart from the threat of IRS collection actions, taxpayers will pay more overall due to the penalties applied monthly. Therefore, a full or partial payment of the taxes owed can save a taxpayer money in the long run.
If the tax amount owed can be paid in full, taxpayers are advised to pay immediately. All others should research and apply for an IRS debt payment plan to resolve their tax debt. IRS programs include an Installment Agreement and a Partial Payment Installment Agreement. Most taxpayers qualify for an Installment Agreement. Under this arrangement, taxpayers pay their tax debt in monthly payments over a predetermined period of time.
The IRS sends notices to taxpayers who owe back taxes, informing them about their tax debt and how to pay it. Taxpayers must begin resolution efforts as soon as they receive an IRS notice to avoid a lien or levy. The IRS charges a penalty for applying for a program a taxpayer clearly cannot qualify for.
If a taxpayer has unique circumstances or a large tax debt, or is unsure of the IRS debt program they qualify for, they should seek the services of a tax expert to choose the most appropriate payment plan. Tax help can be sought to achieve a favorable resolution through negotiations with the IRS.
The late payment of taxes should be avoided to save money, time and complications. Even if a taxpayer cannot pay the full amount owed before the deadline, efforts for resolution must be made to avoid penalties, interest, and possible collection actions by the IRS.