Tackling Tax Return and Tax Debt Penalties

TAX RETURN & TAX DEBT TACKLING PENALTIES COMMON TAX PENALTIES 1. LATE FILING PENALTY Taxes are Penalty of up to 25% added to tax debt due 4/15 2. FAILURE TO PAY PENALTY Payments are due when taxes are filed Penalty of 0.5 of 1 percent of your unpaid taxes each month Penalty can be as much as 25% of unpaid taxes 3. IMPROPER DEDUCTIONS AND SUBSTANTIAL UNDERSTATEMENT PENALTY Examples: Home office, charitable donations 20% Accuracy Related Penalty Additional penalties and interest due Understating tax due by at least 10% or $5,000 Penalty of up to 20% of taxes due WHAT HAPPENS IF YOU IGNORE PENALTIES? IRS WILL TRY TO COLLECT IF YOU DON'T PAY Wage garnishment: IRS seizes wages Bank account levy: IRS takes money directly out of your account Tax lien: IRS puts claim on your property FACING IRS PENALTIES? STEPS TO TAKE Hire a professional tax consultant Experienced consultants know tax codes and IRS procedures Can stop liens or levies and resolve tax debts Not a solicitation for legal services PROVIDED BY: WALL & ASSOCIATES INC. WWW.WALLANDASSOCIATES.NET SOURCE: http://www.irs.gov/uac/Avoiding-Penalties-and-the-Tax-Gap