What Happens if I Cannot File My Income Tax Return on Time?

It is easy to put off your taxes. Unfortunately, there are financial penalties if you don’t file your federal income tax return by the deadline. Even if you get an extension, you will still have to pay what you owe by April 15. If you didn’t file on time, file as soon as possible. If you didn’t pay your taxes, pay as much as you can now to avoid additional penalties and interest.

This article explains your options when you can’t file your taxes on time. If you have questions about what you can do if you can’t file your taxes, contact an experienced tax lawyer for legal advice. 

Are There Penalties for Not Filing Your Tax Return?

There are financial penalties if you don’t file or pay your taxes. After the deadline passes, there are both late payment and late filing penalties. The failure-to-file penalty is 5% of taxes owed for each month it is late, up to a maximum of 25%. The failure-to-pay penalty is 0.5% for each month, up to a maximum of 25%. The IRS will also add interest, compounded daily.

What Is the Deadline for Filing Taxes?

Tax day is April 15. If tax day falls on a weekend or holiday, it may be within a few days after. You can check the current tax filing deadline for the current tax year on the IRS website.

This is the tax deadline for filing and paying your taxes. If you don’t pay by April 15, the IRS can begin assessing penalties and interest. Penalties and interest continue until you file and pay your back taxes in full.

Can You Get More Time to File Your Taxes?

You can get an automatic extension to file your taxes. A filing extension gives you an additional six months to file. For most taxpayers, this gives you until October 15 to file. However, an extension does not give you more time to pay your taxes. You still have to pay an estimate of what you owe by the April 15 due date.

You can get an extension by filing Tax Form 4868. You can e-file, paper file, or ask your tax professional to file for an extension. You can also make a payment indicating it’s for an extension, and the IRS will give you an additional six months to file your return.

Do You Have To File on Time if You Are Outside the Country?

If you are living outside of the U.S., you may have additional time to file your income tax return. Most taxpayers living out of the country have an additional two months to file their taxes. This gives you until June 15 for the prior tax year filing.

If you are in the military and serving overseas or in an active combat zone, you may also have extra time to file. After the end of service in a combat zone, you have an additional 180 days to file and pay your taxes.

Can You Go to Jail for Not Filing Taxes?

In most cases, the IRS is more interested in getting their money than putting you behind bars. However, if you have committed tax fraud or tax evasion, you may face criminal charges. Tax evasion and tax fraud are felony charges. If you are convicted of tax evasion, penalties can include up to five years imprisonment.

How Can the IRS Collect on Tax Debt?

The IRS will send you a CP 504 notice of intent to levy for unpaid taxes due. The notice indicates the amount due and the payment due date. If you don’t respond to the IRS notice, the IRS can seize your property, including:

• Taking a state tax refund
• Wage garnishment
• Garnishing your bank accounts
• Taking your Social Security benefits

If you have unpaid taxes and get a notice from the IRS, you can pay the tax bill, challenge the assessment, or contact the IRS to arrange a tax payment plan.

Can You Pay Off Taxes With a Payment Plan?

If you don’t have the money to pay your taxes, contact the IRS as soon as possible. The IRS can come up with an installment agreement to pay your taxes. Depending on the terms of the payment plan, this can also lower the continuing late payment penalties. If you fail to make a payment on time, the IRS can collect the total amount of tax.

Your tax law attorney may also be able to negotiate an Offer in Compromise (OIC). An OIC is a way to settle your tax liability for a lower amount of money. The IRS may not grant an OIC to all tax filers. Be wary of companies that offer tax debt solutions that are too good to be true. It could cause you more financial trouble.

For legal advice about your tax issues, talk to an experienced tax lawyer about your options if you can’t file or pay your taxes.