request an extension to file, you must complete Form 4868 and
file it with the IRS by April 15 for the year your tax return
is due. This gives you an automatic four month extension. To get
a current copy, visit your district office or call 800-TAX-FORM.
You still must pay at least 90% of the tax due by April 15th or
the IRS will fine you 1/2 of 1% of the taxes you owe per month
until you do pay.
you file a Form 4868 with the IRS, the state of California will
automatically grant a six month extension as well. You may need
to include a copy of your federal return as well as a copy of
Form 4868 with your state return. If you still need or want more
time, you can request a second extension from the IRS by filing
Form 2688. You must file this form by August 15 and must state
"good cause" for needing more time. The second extension
is granted at the discretion of the IRS.
if you haven't filed?
if you can't pay the tax you owe, it is still better to file a
return. It is a crime not to file a tax return if taxes are owed.
According to the IRS a "willful failure to file" a tax
return is a misdemeanor that can get you up to a year in jail
and a $25,000 fine for each year of non-filing. There is no criminal
penalty if you file, but withhold paying the taxes. You will owe
interest and penalties, but you can't be criminally fined or sent
if you can't pay what you owe?
as much as you can and immediately contact the IRS to explain
your circumstances. The IRS offers an Installment Agreement plan
to those who owe taxes but do not have the funds to pay in full.
Interest and possibly penalty fees will be added to your balance,
as well as a one-time user fee of $43. To apply, complete Form
9465, Installment Agreement Request.
in Compromise - When the facts support the likelihood that the
IRS will be unable to collect the debt in full, the IRS may accept
an Offer in Compromise to settle unpaid tax accounts for less
than the full amount. The amount you offer must reflect your maximum
ability to pay, taking into account all your assets and future
income. You can get Form 656, Offer in Compromise, and Form 433A,
Collection Information Statement for Individuals, plus additional
information regarding the filing procedure from the IRS website
or at any IRS office.
if you take no action to pay?
If you do not take some action to pay your bill, the
IRS may take any of the following actions:
– Once the IRS assesses the liability, sends
you a notice and demand for payment, and payment is not received
within 10 days of the notice, a lien may be created for the
amount of your tax debt. By filing a Notice of Federal Tax Lien,
the Government is providing a public notice to your creditors
that the Government has a claim against all your property. This
notice will appear on your credit report and could affect your
ability to obtain credit.
– A levy is one method the IRS uses to collect tax that
you have not voluntarily paid. It means they can, by legal authority,
take property to satisfy a tax debt. Levies can be made on property
like your house, car or boat, or on property that is yours,
but is held by third parties like wages, state tax returns or
bank accounts. A levy is different from a lien. A lien is a
claim used as security for the tax debt, while a levy is used
to actually take the property to satisfy the tax debt.
rights as a taxpayer
following is a summary of Publication 1, Your Rights as a Taxpayer.
It explains some of your most important rights, including your
right to be treated fairly, professionally, promptly, and
courteously by IRS employees.
you do not agree with IRS decisions you have the right to an
administrative review with the employee's manager. You may represent
yourself or you many have an attorney, certified public accountant,
enrolled agent or any person enrolled to practice before the
Internal Revenue Service represent you.
have the right to request that the IRS transfer your tax case
to another IRS office. You have the right to ask for and receive
a receipt for all payments you make. You also have the right
to receive copies or confirmation of all contractual arrangements
that you make with the IRS.
Problems Resolution Program at the IRS provides an avenue to
help resolve your problem when you believe that: 1) your account
information is incorrect, 2) a significant matter or event is
not being considered in your case, or 3) your rights as a taxpayer
have been violated.