What Should You Do If You Missed the April 15 Tax Return Deadline?

The federal tax return filing deadline (April 15) has come and gone, but what happens to taxpayers who did not file?

The Cal Poly LITC has compiled several important facts, information, and potential solutions for taxpayers who have not yet filed their 2023 tax returns.

Is it worth it to file my tax returns now or should I wait until I get a letter from the IRS?

It is worth it to pay now, even if that means only paying a portion of the due balance. The IRS urges “[filing] tax returns and [paying] any taxes owed quickly to reduce any penalties and interest.” (IRS)

Note: interest and penalties will accrue on taxes owed until the entire balance is paid off.

What are the penalties for not filing my tax return?

If you missed the April 15 tax return deadline and did not file your tax return with the IRS, you will likely incur several penalties and interest including:

  • Failure-to-file penalty: for individual taxpayers, this penalty is 5% of your unpaid taxes for each month (or partial month) that your taxes stay unpaid, capping off at 25% of the total balance due. (WSJ)
  • Failure-to-pay penalty: 0.5% of the unpaid balance each month up to 25% of the total balance due. (WSJ)
  • Other penalties: if time passes and you still do not pay your balance and file your tax return, the IRS may act against you by garnishing your wages, levying your bank accounts, etc.

Note: other penalties for failing to file your tax return/pay your taxes will not occur without the IRS first notifying you.

How can I avoid or reduce penalties/interest?

Pay your taxes at or before the April 15 deadline.

Set up a payment plan with the IRS: interest and other penalties will be far less if the total balance due is being reduced over time with a payment plan. Additionally, taxpayers who enter a payment plan with the IRS get their failure-to-pay penalties reduced from 0.5% to 0.25%.

If this is your first time receiving a penalty, you can try to get the penalty waived by calling the IRS and asking for a first-time penalty abatement.

If you have a pending case with the IRS, you could seek out your local LITC and potentially become a client at which point the LITC could assist you in resolving your controversy

Note: LITC services are free-of-charge for clients, however the LITC cannot guarantee clients they will/will not owe the IRS some amount of money when their case is resolved.

Note: This information cannot take the place of advice from a lawyer. Each case is different and needs individual legal advice. You should contact the LITC or a private attorney if you need representation on a tax matter or if you have questions.

Sources

~ Tate Metro