I owe money on taxes. What penalties will I be charged, and what if I cant pay all by due date?
I didn’t realize that how high the intrest rate was if I didn’t begin paying right away. I thought that if I paid in full by due date, I would be ok. How does the IRS work out payment plans? If it continues to increase until I pay all off, how will I ever pay? It started off as $1200, but I was told the intrest rate was .08 percent DAILY. I received this notice about four months ago. There is no way I can pay all that off, including following charges by April. I’m sure I’m not alone in this boat. I’ll send in my papers and set up a plan… but if anyone here can speak from experience, please let me know how this works and what sort of relief there is. Please only respond if you know, not just a hunch.
,,IRS Penalties? ,IRS penalties and Interest for back taxes? ,I e-filed my taxes 30 minutes late, will i suffer any penalties? ,Penalties and Interest on Money Owed to IRS? ,missed taxes last year – penalties for it, and back-tax filing? ,Comments (4)
You better get down to the IRS and make some type of payment arrangements. As long as they are getting their money voluntarily then they will not bother you.
IRS charges loan shark rates….get a personal loan to pay them off..even at 20% you’d do better than the irs rate.
I switched 2 numbers in one of my returns making about a $90 error….I had to pay them $387. …for a MATH error.
I use a program now.
Interest is 8% per YEAR and will drop to 7% January 1. Late payment penalty is 1/2% per month increasing to 1% when IRS sends you a notice of intent to levy by certified mail.
You can set up an installment agreement but it will cost you an extra $105 (half that for direct debit from your checking account.) If you can reduce the balance, IRS will have bigger fish to fry.
If you are going to have a refund on your 2007 tax return, it will be applied to what you owe to 2006 as of the date the return is processed or April 15 whichever is earlier. File your return as early as possible because the earlier posting date will save you some penalty and interest.
The due date was 4/15. If you had an extension until 10/15, that was only for the paperwork, not the money. If you go back and look carefully at the extension form, you will see that it suggested you make an guestimated payment to reduce any balance due.
If you are calling the IRS for the first time and you truly think you will have this paid off by 3/1/2008, ask for an extension to pay. Interest (.08 annually) and penalties (.005 per month) will still apply, but you won’t have to pay the $105 user fee and won’t have to make monthly payments.