IRS penalties can be incredibly costly. Penalties often reach as high as 25% of the total tax bill. In fact, here’s some of the most common penalties that the IRS issues, which you can consider interest on top of what you already owe as a tax payment:
- 5% of the amount of unpaid tax per month; up to 25% as a maximum payment
- Minimum penalty standards are $205 for returns that are over 60 days late
- Minimum penalty will be either $205 or 100% of the tax due on the tax return
You can see how this could get pretty costly for you, especially since if you’re late on your tax bill, you probably didn’t have the money to begin with. Having a fee imposed on you for being late is the last thing that you need when you’re trying to get back on stable ground and recover your financial stability.
The best thing you can do when you’re struggling with an IRS penalty is get a tax relief expert on your side. If there’s anything that’s common knowledge about taxes, it’s that there are loopholes. Contrary to popular belief, the IRS will actually work with you if you fall behind on your tax payments. After all, they want your tax payment to be made successfully, not see you fall into debt that you can’t get out of. Much like a creditor allows you to pay monthly toward your bill to get out of debt, the IRS provides a number of options as well, including:
- Filing for uncollectible status
- Getting a negotiated settlement
Your tax relief specialist can coach you through these options and help you determine which one is the better choice.
Act Before your Penalties Increase
As you can see with the IRS’ penalty structure, the amount you pay as a penalty fee increases for each month you’re late. It’s best to act before your penalties increase, even if you don’t have the money to pay it back. A tax relief specialist helps solve these problems, that are more common than you think. There are lots of people struggling with high tax bills and IRS penalties and your quickest path out of debt is to seek help.