If you did not file your tax return or pay your taxes by the April 15 deadline, you must make immediate efforts to get caught up. The IRS charges penalties for late filing and late payment of taxes.
Late Filing of Tax Return
If you are not sure whether you are required to file a return or not, you can use ‘Do I Need to File a Tax Return’ on the IRS website – irs.gov. If you find that you are required to file, you will need to pay the 5% penalty for the month or part of the month for which the return was not filed.
A penalty is not charged for failure-to-file if you are due a refund. To claim the refund, you can file a return within 3 years of its original due date. If you do not file within this timeframe, you forfeit the refund. However, the statute of limitations for collection of back taxes starts when a balance is assessed. The IRS usually files a substitute tax return to initiate collection of back taxes if the taxpayer does not file the return.
Late Payment of Taxes
Penalty for late payment of taxes is charged at 0.5% each month. If you did not pay your taxes by the due date (regardless of extension of time to file), you are charged a failure-to-pay penalty each month or part of the month for which taxes have remained unpaid.
You may have the penalty forgiven if you have a reasonable cause for late payment and/or filing, or if the IRS has allowed you more time to pay taxes due to hardship. You can also apply for an IRS Installment Agreement to pay your back taxes in installments over the course of months or years. For both failure-to-file and failure-to-pay, interest is also charged monthly.
For further assistance, you may use IRS help tools on their website such as the Interactive Tax Assistant and Tax Trails.