Here’s Is What Happens When You Don’t File Your IRX Tax Return: This year, tax deadline day was extended just a few days from April 15 to 18. The reason for the delay was that the Internal Revenue Service’s offices in Washington, D.C., were closed on April 15 in observation of Emancipation Day.
The holiday technically falls on April 16 but is observed on the closest weekday when the holiday falls on a weekend – giving IRS workers the day off on Friday.
Now that tax day has finally passed, you may be wondering where you stand if you forgot to file your taxes this year. While the situation isn’t ideal, you’re not without options.
Failure to File and What It Means
If you don’t file your taxes by April 18, you are likely to be hit with a Failure to File Penalty. The Internal Revenue Service will charge you a percentage of the taxes that you didn’t pay on time as a penalty.
The percentage is determined by the length of time it took you to file your return and make a payment, as well as the amount of unpaid tax as of the original due date.
The penalty is 5% of the unpaid taxes for every month, or part of a month, that the tax return is late. This will be capped at 25% of unpaid taxes.
If after five months you still haven’t paid your taxes, a Failure to File Penalty will max out but you will still be hit by a Failure to Pay Penalty that will continue to increase until the tax is paid.
The IRS also charges interest on a penalty.
What To Do If You Get a Failure to File Penalty
If you receive Failure to File or Failure to Pay penalties, you have three options:
Dispute the Penalty – If the penalty was imposed on you by mistake, you can dispute a penalty. You may also dispute the penalty if you disagree with the amount that you owe. When contacting the IRS, be sure to have a copy of the letter sent to you, details about the penalty, and evidence and explanations for why you believe the penalty should be removed.\
Remove or Reduce a Penalty – If you can show a reasonable cause for why you didn’t meet the tax deadline – perhaps a relative dying or another unavoidable problem – then the IRS may be willing to remove or reduce those penalties.
However, you are likely to face some delays in contacting the IRS given the agency’s current backlog of tax filings.
Pay the Penalty – This may be the simplest option. If you forgot to make your payment or couldn’t for an entirely innocent reason, simply paying the penalty will stop the fee from increasing and put you back in good standing with the IRS
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.