As it does each and every tax year the April 15th tax filing and payment deadline has come and gone. While the majority of US taxpayers file and pay their taxes on time, problems in receiving documentation and other issues can necessitate filing for an extension. Those taxpayers who required an extension should have already requested one from the IRS by filing form 4868. If you expected to owe money to the IRS for the 2014 tax year, you also should have made an estimated tax payment. However others may have neglected taking any action on their taxes because they incorrectly thought that taking no action and concealing income would make their tax problems better. In other situations the taxpayer may not have filed an extension, filed taxes despite an inability to pay, or failed to pay taxes due and owing despite filing. Finding oneself in any of the above situations can be anxiety-inducing and nerve-wracking.
The Hoffman Law Offices are dedicated to helping taxpayers with difficult tax problems and situations. We are happy to offer straight-forward solutions to difficult tax questions including whether it is worse to fail to file taxes or to fail to pay taxes? Furthermore we will address what will happen when a taxpayer falls to both file and pay taxes. If you failed to file or pay taxes this year, we can help. Call the Hoffman Law Offices at
What consequences do I face if I fail to file taxes?
All US taxpayers must file their taxes every year unless their income does not reach the minimum threshold to give rise to a tax filing obligation. However, even when one does not make enough to be required to file taxes, the only way to receive a tax refund is to file. Otherwise there are a broad array of laws and legislation addressing the failure to file taxes. They include:
- IRC 6011(e)(2) – For partnerships with more than 100 partners, an electronic return must be provided. Failure to provide the electronic return will be assessed per each partner beyond the 100 partners.
- IRC 6031 – This provision makes it mandatory for partnerships to file a tax return.
- IRC 6651 – This provision of the tax code addresses the failure to file taxes by an individual taxpayer.
- IRC 6699 – This tax code provision address failures to file taxes by an S Corporation.
Typically, the failure to file penalty is more severe than the failure to pay. In most situations where willfulness is not present, the penalty is assessed at 5 percent of the tax that was unfiled and unpaid. The penalty is imposed for each month or part of a month where it remains unpaid. This means that even a deficiency for a single day in a month will subject you to the full penalty for that month.
What can happen if I fail to pay some or all of my taxes but I file?
If you file your taxes but are unable to satisfy the full amount of the tax obligation, then the failure to pay penalty can apply. Additionally under IRC 6654 some taxpayers have an obligation to make estimated tax payments. This provision addresses the consequences when a taxpayer fails to make four quarterly payments with each comprised of roughly 25 percent of the estimated tax. Penalties for failure to pay an estimated tax are addressed by IRC 6621.
The failure to pay penalty will accrue at one-half of one-percent of the unpaid tax for the duration of the time period where the tax remains unpaid and overdue. As with the failure to file penalty, the penalty is assessed for each month or part of a month where the tax remains unpaid. If the taxpayer is likely to be unable to pay the full amount of taxes due, the penalty can be avoided by filing or requesting an extension prior to the original deadline and by paying at least 90 percent of the actual tax that will be due.
The Hoffman Law Offices can assist you if you have failed to file or pay taxes
Penalties due to a failure to file, a failure to pay taxes or both can quickly add up and result in significant tax liabilities. If you are concerned about a failure to file or pay in 2014 or in past tax years, contact the Hoffman Law Office by calling 800-897-3915 or contact us online. We offer free and confidential initial consultations.