Penalty for Failure to File Income Tax
All taxpayers who are required to file an income tax return based upon IRS guidelines should file their returns on or before April 15th. Taxpayers who miss the filing deadline could expose themselves to a variety of IRS enforcement actions. Fortunately, the steps that the IRS takes to secure past due returns and the cost you could incur is a result is relatively straightforward.
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Amount
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The Failure to File Penalty is 5 percent of the unpaid tax for each month the tax return is late. The penalty increases to a minimum of the lesser of $135.00 or 100 percent of the unpaid tax for returns filed more than 60 days after the due date. In addition to the FTF penalty, interest is assessed on any amount of unpaid tax. However, if no tax is owed on the return, the IRS does not assess any penalties or interest charges even if the return is late.
Abatement
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Taxpayers who have a reasonable cause for filing their income tax returns late may qualify for an abatement. Examples of circumstances that meet the IRS's definition of reasonable cause include overseas travel, military service and illness. To apply for an abatement of your penalty, download IRS Form 843 from the IRS website.
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Considerations
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Penalties are only assessed for taxpayers who are required to file a return based upon IRS guidelines. You are required to file a return if you earn more than $9,350 if single, $12,000 if head of household, $18,700 if married filing jointly, $3,650 if married filing separately and $15,050 if you are a qualifying widow.
Forfeiture
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In addition to being assessed penalty and interest charges, taxpayers who fail to file their return within three years of the due date also lose their right to any refund for which they may be eligible.
Warning
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Taxpayers who are required to file an income tax return and neglect to do so could discover that the IRS has filed a return on their behalf. Better known as a substitute filing, a return filed by the IRS does not afford the taxpayer any credits or deductions for which he or she may be eligible, thus increasing the overall tax liability.
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