The Newsroom Topics
Issue Number: IR-2023-113
Inside This Issue
Special options available to help taxpayers who missed the April deadline; people encouraged to file, pay by June 14 to avoid larger penalties and interest
WASHINGTON — The Internal Revenue Service today encouraged taxpayers who owe unpaid taxes and missed the April 18 tax deadline to file their 2022 federal income tax return and pay any tax due by Wednesday, June 14, to avoid a larger late-filing penalty.
Penalties and interest can grow quickly. The IRS reminded taxpayers about important payment programs that can help as well as the availability of special first-time penalty abatement relief for those who qualify.
Normally the late-filing penalty for each month — or part of a month that a return is late — is 5% of the unpaid tax, up to a maximum of 25 percent. The late-filing penalty will stop accruing once the taxpayer files.
But, by law, if a return is more than 60 days late, the minimum late-filing penalty, also known as a Failure to File penalty, is either $435 or 100% of the unpaid tax, whichever is less. This means the penalty will equal the tax due if the taxpayer owes $435 or less. If they owe more than $435, the minimum penalty will be $435.
The IRS must receive the return by June 14; returns mailed on that date normally won’t avoid the larger penalty. For that reason, the IRS recommends taxpayers file electronically by June 14.
In addition, taxpayers can limit late-payment penalties and interest charges by paying their tax electronically. The fastest and easiest way to do that is with IRS Direct Pay, a free service available only on IRS.gov. Several other electronic payment options are also available. Visit IRS.gov/payments for details.
Late-payment penalties and interest will stop accruing as soon as the tax is paid. The taxpayer need not figure any of these charges. Instead, the IRS will bill them for any amount due.
There are many important provisions that can help taxpayers in these situations.
Penalty relief for some
Taxpayers who have filed and paid on time and have not been assessed any penalties for the past three years often qualify to have the penalty abated. See the First-Time Penalty Abatement page on IRS.gov. A taxpayer who does not qualify for this relief may still qualify for penalty relief if their failure to file or pay on time was due to reasonable cause and not willful neglect.
Anyone who receives a penalty notice from the IRS should read it carefully and follow its instructions for requesting relief. See Penalty Relief on IRS.gov for the types of penalty relief and how to make the request.
In addition to penalties, interest will be charged on any tax not paid by the April 18 due date and any subsequent penalties. Interest stops accruing as soon as the balance due is paid in full. By law, interest abatement is not an option for reasonable cause or as first-time relief.
Options if unable to pay what’s owed
Many taxpayers mistakenly delay filing because they are unable to pay what they owe. Often, these taxpayers qualify for one of the payment options available from the IRS.
Individual taxpayer’s online payment plan options include:
Some automatically get more time to file
Some taxpayers get more time to file, even if they didn’t request an extension. These special deadlines affect penalty and interest calculations for those who qualify, such as members of the military serving in combat zones, taxpayers living outside the U.S. and those living in declared disaster areas.
Those serving in combat zones
Combat zone extensions also give affected taxpayers more time for a variety of other tax-related actions. Various circumstances affect the exact length of the extension available to taxpayers. Details, including examples illustrating how these extensions are calculated, are in the Extensions of Deadlines section in Publication 3.
Taxpayers, military on duty living outside the United States
The special June 15 deadline also applies to members of the military on duty outside the U.S. and Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to their return explaining which of these situations apply. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, on IRS.gov.
When to check withholding
To protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year, taxpayers should check their withholding every year. For help determining the right amount to withhold, use the Tax Withholding Estimator on IRS.gov.
Thank you for subscribing to the IRS Newswire, an IRS e-mail service.
If you know someone who might want to subscribe to this mailing list, please forward this message to them so they can subscribe.
This message was distributed automatically from the mailing list IRS Newswire. Please Do Not Reply To This Message.
|This email was sent to email@example.com by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington DC 20535