Taxpayers that have failed to file tax returns for some extended period of time should strongly consider doing so immediately. Even if taxpayers have filed for an extension, time is of the essence to avoid costly penalties as the IRS assesses failure to file (FTF) and failure to pay (FTP) penalties in this situation.
The failure to file penalty is assessed at a rate of 5% per month or partial month up to a maximum rate of 25%. The failure to pay penalty is assessed at a rate of 0.5% per month or partial month up to a maximum rate of 25%. If the IRS assesses both the FTF and FTP penalties, the FTF penalty is reduced by the amount of the FTP penalty.
7 Deadly Tax Sins
When it comes to the IRS, some bad acts are worse than others. We have compiled below the top ones to avoid at all costs. However, if you should find yourself in the middle of one, you should certainly call tax attorneys to get you out of the bad situation (yes, it is a bad situation).