What Are the Penalties and Interest On Unpaid Taxes?

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For the IRS, collecting on unpaid back taxes is a very serious matter and one that they have become increasingly stringent about. This is why the IRS has various powers to try and not only ensure that tax returns are filed on time but also to ensure that taxes are paid on time. For those who fail to pay their taxes by the date required there will be interest and penalties to face unless some prior arrangement or agreement has been made with the IRS.

In order to avoid interest and penalties it is important to ensure that you make your tax payments on time. When it comes to penalties and interest on unpaid taxes the IRS charges a late payment penalty of 0.5 percent for each month or part month the payment is late, which goes up to a maximum of 25 percent. In the event that the IRS issues a notice of intent to levy but the sum owed still remains unpaid ten days after this, the 0.5 percent increases to 1 percent.

If you are struggling to make your tax payment on time, it is important to ensure you speak to the IRS or a tax official so that you can find the most suitable and affordable solution rather than being hit with penalties and fines or eventually facing liens or levies. By contacting either the tax office or a tax professional you will be able to learn more about the options that are available to you to enable you to settle your taxes and reduce the risk of being penalized.

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