The Tax Extension Deadline is Approaching!
For the individuals that were able to apply for extensions prior to the IRS closing, your deadline is just days away. The tax extension deadline for 2020 is October 15. So, what does this mean for you?
You have two days to file and pay your taxes. The tax extension kept late fees and other penalties away for a few additional months. However, you are no longer protected by the extension.
What are the consequences of not filing by the tax extension deadline?
Failing to file by the 15th means that you are now susceptible to the late penalties. Take 25% of what you currently owe, now add that to the original balance due. This is what your late fee can look like. Your late fee can also be 5% added to your tax debt each month that your file is late.
Depending on how much you owe, this can make your tax debt much harder to pay off. Should you choose not to make payments with the added penalties, you’ll have to face interest rates and before you know it, garnishments can occur.
By next year, you will owe what we call “back taxes.” When you owe back taxes to the IRS, you are subject to more serious penalties. Delinquent taxpayers can lose control of their bank accounts and in some cases, even their property.
What to do if you can’t pay your taxes on time
In the event that you are unable to file and pay your taxes by the tax extension deadline, you still have options. The Fresh Start Program, for instance, can help with finding relief. This program was created to help taxpayers in situations where they cannot afford to pay their taxes.
If you’re experiencing financial hardship, especially in 2020, you are likely a good candidate for tax relief. More taxpayers are being accepted than ever due to the economy’s decline this year.
Click here to pre-qualify for tax relief if you are unable to pay your tax liability.
Any new or systemic Liens and/or Levies will also be suspended for the time being.
For taxpayers who are considered “seriously delinquent”, the IRS will suspend any new certifications for the remaining period. Any taxpayer who falls into this category in reminded and encouraged to enter into an Installment Agreement or apply for an Offer In Compromise.
The IRS will not forward any new delinquent accounts to private collection agencies at this time.
Taxpayers have until July 15, 2020 to verify to the IRS they are qualify for the Earned Income Tax Credit or to confirm their income. If the taxpayer is unable to verify their credentials or provide appropriate documents for this credit, they are encouraged to notify the IRS before the deadline. No cases will be denied this credit for failure to provide requested information until July 15.
Case workers will continue business as usual. However, most case work will be conducted remotely (video/over the phone conferences). Any requests for documentation sent by the Office of Appeals should be responded to in a timely manner to ensure a smooth process.
The IRS will continue to take the appropriate measures to stay compliant and protect the applicable statutes of limitations. In situations where certain statutes may be compromised, taxpayers are encouraged to extend such statutes. Otherwise, Notices of Deficiency will be issued by the IRS and similar actions will be pursued to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.
Practitioners are reminded that PPS wait times may be significantly longer, depending on staffing levels and allocations going forward. The IRS will continue to monitor this as situations develop.
“The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” Rettig said. “We are committed to helping people get through this period, and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others.”
Learn how easy it is to qualify for tax savings.