What Are the Penalties for Not Filing Your Taxes?

You may think that what you do will never be noticed by the IRS because of the millions of other taxpayers. You convince yourself that it doesn't matter even if you don't settle your taxes. You are not right, unfortunately, as the IRS will know. What are the consequences for not filing your taxes? Who will you turn   to – will the IRS be of assistance

You will probably think that not filing for your taxes is a small thing but the government perceives this as stealing and considers it an offense. Penalties can be categorized into three levels, depending on your situation :

* Penalties for filing your taxes late
* Not filing for taxes at all
* Not paying taxes

Late filing charges the least overdue fees. A mere 5% monthly interest is added to your total tax due. The IRS, however, can charge you up to a maximum of 25% as penalty.  Let's take a look at one example. Filing for your tax in June when the deadline is on April 15 gives you an approximation of 15% fine.

What options do you have if you still have not filed your tax return and April 15 is already fast approaching?

This is an area where you can use IRS help by filing for an extension. It is as easy as filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.You then have up to August 15 to file. If you need more extension, you may file Form 2688, to buy more time.If no request is forwarded to the IRS, the 5% penalty starts accruing.

Note that filing for an extension doesn't give you more time to pay the taxes you owe.  By April 15, you need to pay for at least 90% of your dues. Otherwise, you will be charged with a 0.5% penalty. This scenario then brings us to the next classification of penalty, which is not paying what you owe.

For sure, it is better not to pay the whole amount than not file at all.  Let us use the example that you owe $5000. Paying only $1000 results to a mere $20 charge, which is 0.5% multiplied by $4000. This shows then that you need to file and pay in whatever way you can.

Failing to pay your taxes after several months increases the penalty by 1% per month. If this continues on a regular basis, the IRS may intervene by letting you mortgage your assets or file for a loan. They may also make use of other more severe methods like wage garnishment or levying bank loans.

The IRS can really help you before your situation gets out of control.  Extensions ranging from 30-120 days and assistance in laying out a payment arrangement may be provided Installment plans, temporary delays and Offer in Compromise are yet other alternatives that can be explored. For additional information, visit  the IRS site. This all goes to show then that the IRS, after all, is not that bad.

The penalty for not even bothering to file your taxes is most critical. If you do not file, a 5% monthly fine is charged to the amount you owe. But this amount cannot exceed 25%.  Say you owe $5000 and have been five months late in filing. To get your penalty, you need to multiply 5000 by 25%. This gives you a whopping $1250 on top of your bill. More importantly, this situation does not make it easy for you to ask for assistance from the IRS.

The IRS, however, is patient as it repeatedly extends its hands to delinquent tax payers.  The agency can accomplish a return and computes the bills with applicable fees and mails this to the person. This move, on the other hand, forfeits the taxpayer's deductions due to him. If this does not work, the IRS can then press for criminal and civil charges against the person.I am sure you don't want to face these consequences, therefore, I am advising you to ask IRS help so you can come up with ways to pay for your taxes.