What Happens If I Don’t Pay My IRS Tax Due on Time? If you are looking for an answer to your question, read this article to the end. One of the issues that American citizens wonder about is tax debts. As it is known, the government has a sensitive structure against tax debts and wants every citizen to pay their taxes. Tax debt payments are paid within certain laws. Who will pay how much and how much tax is determined by these laws.
The government calculates the tax liability of the citizen within the framework of these laws and transmits it through the IRS. This notification is usually by mail and e-mail. Citizens cannot pay their tax debts in these declarations for some reasons. Many reasons such as economic difficulties, bankruptcy, failure to receive notifications are just a few of the reasons for not paying the tax. Citizens who can’t pay the tax do the most research on “What Happens If I Don’t Pay My IRS Tax Due on Time?” is the question.
For citizens who won’t be able to pay their taxes on time, the IRS offers different payment options. To take advantage of these options, you must report your situation to the IRS. What Are the IRS Payment Plan Options?
IRS Payment Options
Pay Now: For those who can pay their tax bills right away, the IRS makes it simple and free. This payment method is the government’s favorite payment method. Because the taxpayer citizen immediately gives his money to the government. You can pay directly which takes the money directly from your bank account. Or you can use the Electronic Federal Tax Payment System (EFTPS) online or by phone.
Short Term Payment Plan
You can choose this payment option if you have been short of cash recently and you have less than $100,000 in tax debt and you think you can pay it off in less than 120 days. The most important thing to know here is that you may get some penalty and interest in this form of payment. Therefore, when creating your payment plan, do not forget to add these penalties and interest fees to the amount you will pay.
Interest rates or penalty fees on the short-term payment option can vary between states. You can apply online, in person or by phone and set up automatic payments from your checking account additional-cost free. You can also use a wire transfer or debit/credit card, but charges apply when paying by card.
Long-term payment plan (installment contract):
If you need more than 120 days to pay your tax bill and penalties and you owe $50,000 or less, consider a long-term payment plan. The long-term payment plan has two options. These are automatic payment and non-automatic payment methods. You pay a $31 setup fee and agree to automatic withdrawals for your outstanding balance until fully paid. The fee for non-automatic payment is $149. If you are qualified as low-income, It is $43.
The Compromised Proposal
The Compromised Proposal: It allows you to settle the debt you owe by paying less than the full amount due. This option is only available for people who are unable to pay their bills in full or for whom paying their tax debt will cause serious financial difficulties.
Penalty for Not Paying Tax
You owe 0.5 percent of your unpaid taxes for every month or part of the month you don’t pay. This can be up to 25 percent of your unpaid taxes. What many people don’t understand is that you can actually file your taxes even if you can’t pay your tax bill. The IRS recommends that citizens should file their taxes on time to avoid the penalty for not filing, and then pay as much of the bill as possible before the deadline.
How Long Does It Take to Resolve an IRS Audit By Mail?
One of the most curious issues of citizens in the IRS audit is the duration of tax audit solutions. IRS Mail audits can take from three months to a year to resolve.
I Received Mail From IRS, What Should I Do?
Many people are worried about emails from the IRS. But not every letter from the IRS is bad news. Some mails can be sent to notify changes in tax payment processes. However, if you have received an e-mail about a serious situation regarding your tax debts, you can discuss it with your accountant.