IRS Penalties for Not Filing Returns

Whether due to procrastination, missing forms, or unpredictable circumstances, taxpayers occasionally miss the deadline for filing a return. In this case, filing extensions can be obtained using 1 of 3 methods. If you still can't file on time, expect to pay penalties on the amount you owe. Most importantly, do not ignore notices from the IRS if you miss the filing deadline.

Failure to File Penalty

Taxpayers can be penalized for failing to file by April 15th of the current tax year if they owe the Internal Revenue Service. The penalty is a percentage of the amount owed, and the percentage charged depends on the tax year. Penalties increase when the return is 60 days past due. Returns due after 2008 that are 60 days late are subject to the smaller of either a $135 penalty, or the total amount of the tax bill. Failing to file a return can also result in various types of civil or criminal punishment.

Late Payment Penalty

Taxpayers who file on time but do not pay the amount owed can still be charged the failure-to-file penalty, plus interest on the tax debt. However, paying at least some of your tax bill will reduce the amount of interest charged. Payment arrangements can be made using the Online Payment Agreement to break your tax bill into more manageable amounts.

Filing Extension

Filing for an extension grants more time for filing a return, but does not apply to late payments. You can apply for an extension by making an estimated payment on your tax bill. Other options include filing form 4868 electronically or by mailing in the paper form.

Substitute Return

If you fail to file a return or get in touch with the IRS, your return may be filed for you. Often, this is to the taxpayer's disadvantage, since the Internal Revenue Service files your return based on minimal information. You may miss out on exemptions, credits, and deductions you would have received had you filed your own return.

http://www.irs.gov/formspubs/article/0,,id=186746,00.html

http://www.irs.gov/newsroom/article/0,,id=206279,00.html

http://www.irs.gov/newsroom/article/0,,id=181068,00.html

http://www.irs.gov/pub/irs-pdf/f4868.pdf

http://www.irs.gov/efile/article/0,,id=97400,00.html

http://www.irs.gov/businesses/small/article/0,,id=108330,00.html