Monday September 23, 2019
IRS Offers Advice to Taxpayers Who Missed the Tax-Filing Deadline
In IR-2019-81, the IRS provided guidance for those taxpayers who have not yet filed their 2018 tax returns. The IRS urges taxpayers to file as soon as possible, even if they cannot pay, in order to avoid possible penalties and interest.
For those who did not file by April 15, penalties and interest will not apply if a refund is due. Penalties and interest may apply, however, if taxpayers owe taxes and did not file their tax returns by April 15 (or April 17 for taxpayers residing in Maine or Massachusetts). As such, the IRS urges taxpayers who have not filed and owe taxes to file a return as soon as possible. Taxpayers may use "IRS Free File" on IRS.gov through October 15 to prepare and file their returns.
There are, however, some taxpayers who have additional time to file their taxes and pay any taxes due. This includes some disaster victims, military service members, eligible support personnel in combat zones and U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico (see IRS publication IR-2019-73 for more information).
The IRS also notes that there may be penalty relief available for those whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. The IRS is waiving the penalty for taxpayers who paid at least 80% of their tax liability through federal income tax withholding and/or quarterly estimated tax payments.
For those who do not have additional time to file or do not qualify for penalty relief, penalty fees can add up quickly, so it is important to file as soon as possible. The IRS explains that the late filing penalty on unpaid taxes, also known as the failure-to-file penalty, is usually 5% of the unpaid balance for each month, or part of each month, that the return is late. Note that the failure-to-file penalty may be reduced for any month where the failure-to-pay penalty also applies (see IRS.gov/penalties for more information). If a return is more than 60 days late, then the minimum penalty is the lesser of $210 or 100% of the unpaid tax.
In some instances, taxpayers may qualify for penalty relief. If the taxpayer has a legitimate reason for filing late, he or she should contact the IRS to explain why it was not possible to file or pay by the due date. Additionally, if a taxpayer has not been assessed a penalty for the past three years, he or she may qualify for penalty relief. For more information, visit the first time penalty abatement page on IRS.gov.
The IRS also provided tips for the following issues:
Published May 3, 2019