If you owe the IRS a substantial amount, be sure not to ignore it. Review…
If you mailed payment to the IRS on or before July 15, it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. The IRS will process your payment with the date the IRS received it.
Do not cancel your check, and make sure funds are available for when the IRS processes your payment.
You may mail a check or money order to the IRS. However, to avoid processing delays while the IRS continues to process the backlog of mail, other payment options are available. For example, you may pay online from your bank account using Direct Pay or pay using your debit or credit card.
If you are unable to pay now, our website’s Get Help pages have a wealth of information about various payment options and will guide you through why penalties are charged and, when appropriate, how to request a reversal of those charges, along with steps you can take to avoid the same issues next year.
First, it’s important to understand that applicable penalties and interest will continue to accrue until the account is paid in full, so the sooner you pay the balance, the less you will have to pay in penalties and interest.
Due to COVID-19, the due date for filing your 2019 tax return was postponed to July 15, 2020. If you didn’t request an extension of time to file or send in your tax return by July 15, the IRS may charge a failure to file a penalty. If you didn’t pay your taxes by July 15, the IRS may also charge a failure to pay penalty. If you mailed a payment or tax return to the IRS on or before July 15, it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. The IRS will process your tax return and payment with the date the IRS received it.
For more information about these penalties and how they are calculated, visit Common Penalties for Individuals.
In some cases, the IRS will waive the penalties for filing and paying late. However, you’ll need to ask the IRS to do this. The IRS will consider the following situations for waiving these penalties:
Let’s explore each option to see which one is right for you.
This list is not exhaustive. Other situations may also qualify for reasonable cause relief. When you ask the IRS to remove penalties for a reasonable cause you should explain in writing, with any supporting documentation, what issue(s) you faced and why the issue(s) caused you to file your tax return or pay your taxes late.
Depending on your reasons, you may also need to explain how you’ve corrected the situation so you won’t have problems filing and paying on time in the future.
Another example of administrative waiver involves a taxpayer’s reliance on advice from the IRS. If you received incorrect verbal advice from the IRS, you may qualify for administrative relief of penalties. You should provide detailed information including:
If the IRS rejects your request to remove a penalty, you may be able to request a conference or hearing with the IRS Independent Office of Appeals. You have 30 days from the date of the rejection letter to file your request for an appeal.
You can file an appeal if all the following have occurred:
Refer to Penalty Appeal Eligibility and Publication 4576, Orientation to the Penalty Appeals Process for more details.
The IRS will continue to charge failure-to-pay penalty up to 25% in total or until the tax is paid in full, whichever comes first, so you may want to wait to request penalty relief until after you pay all of the tax due, especially if you are requesting first-time abatement.
If the IRS removes a penalty, the interest charged on that penalty will also be reduced or removed. However, if there is still a balance due interest will continue to accrue until the account is paid in full. See the Interest for Individuals page for additional interest information.
Taxpayer Advocate Service (TAS) can assist taxpayers who find themselves in economic hardship or are dealing with IRS tax problems they’ve been unable to resolve directly with the IRS through normal channels. Learn more about when to call TAS for assistance and how we may be able to assist you.
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