IRS Tax Deadline Wednesday July 15

Federal taxes are due Wednesday, July 15, 2020. With millions of people out of work, there is a concern that many taxpayers will not have the money to pay their income taxes when they file. Even if a taxpayer does not have the funds to pay their tax liability, such a situation should not prevent them from filing their tax return timely. Taxpayers should realize that even if they file an extension solely because they do not have the funds to pay, they will still be assessed with a failure to pay penalty. If you file late without an extension, you can be assessed with a failure to file penalty.

While many people are concerned regarding the inability to pay taxes that they owe, it is imperative to still timely file. The IRS can only collect the amount due, in most cases, for ten years after the IRS assesses it. Therefore, the longer one waits to file, the more time the IRS has to collect. While it is indeed scary to owe the IRS money, taxpayers should understand that even if you do owe money, communicating with the IRS will usually help to stop enforced collection action.

There are also many options from the IRS to help taxpayers who are having trouble paying, such as the IRS People First Initiative. For example at the time of income tax filing, a taxpayer can request an installment agreement to pay the tax liability over time. While interest and penalties will continue to accrue, such an agreement will prevent the IRS from taking any enforced collection activity. When the taxpayer has completed their installment agreement, they might even be eligible for an abatement of the penalty. If the amount due to the IRS is more significant and the taxpayer cannot afford it (or owes money for other tax years), the taxpayer may be eligible for an offer in compromise.  The offer in compromise allows the taxpayer to compromise the amount owed and settle for a lump sum payment that is less than the original amount.

Finally, depending upon the taxpayer’s circumstances, a taxpayer may be placed into currently not collectible status. This provides the taxpayer with time to pay the liability without enforced collection activity. It allows the taxpayer to get back on their feet financially and then address the debt with the IRS at that time.

There are many solutions to an IRS debt, not filing is not a resolution.  Filing timely, when you can’ pay, is imperative and is helpful to the taxpayer.  It is important to remember that October 15, 2020, extension is only an extension to file, not to pay.

Taxpayers should remember, first and foremost, that they should file their income tax for 2019 by June 15, 2020. The IRS will continue to pursue those all matters against taxpayers, and the current pandemic does not give taxpayers any further excuses. As such, it is important for taxpayers to file tax returns or file extensions as soon as possible to begin the time frame for the IRS to begin collections if they are going to. If you fail to timely address a problem raised by the IRS, it may not be possible for an IRS tax attorney to correct the damage done. Contact Robb Longman today at (301) 291-5027 to schedule a phone consultation. Our firm’s IRS tax attorneys, based in Maryland (Bethesda, Rockville) and Washington, DC can help to resolve tax issues (COVID-19 or Coronavirus related or not) as efficiently as possible. Mr. Longman works with his tax clients to devise strategies to help those clients minimize their taxes in their transactions.