What happens if I do not pay my taxes in full?

Posted by Michael Raichelson | Apr 25, 2013 | 0 Comments

If there are monies owed on unpaid taxes, the IRS charges interest from the due date of the return, i.e., typically April 15th, until the date of payment.  The interest rate is the federal short term rate plus three percent, and the interest rate is calculated on a quarterly basis.  Also, if you file a return and fail to pay the entire amount due, you will be hit with a late payment penalty.  The IRS late payment penalty is equal to one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached.  So, for example, if you owe the IRS $10,000, you will be hit with a $50 (i.e., .005 * $10,000) late payment penalty for every month the taxes remained unpaid.

The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals who file by the return due date, the one-half of one percent rate decreases to one-quarter of one percent for any month in which an installment agreement is in effect.  So, it is important to meet with qualified tax resolution counsel to work out an installment agreement, or alternatively, some other tax resolution such as an offer in compromise. 

About the Author

Michael Raichelson

VENTURA & OXNARD BANKRUPTCY ATTORNEY & DEBT SOLUTIONS LAWYER SERVING VENTURA AND LOS ANGELES COUNTY Michael H. Raichelson has over 23 years of experience helping individuals and businesses throughout California and the United States manage their debt problems and find solutions that give them a ...


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The Law Offices of Michael H. Raichelson is located in Calabasas, California, and serves clients in and around Woodland Hills, Wilmington, Harbor City, Carson, Torrance, San Pedro, Long Beach, Compton, Ventura, Gardena, and Los Angeles County.