Late Filing

Generally, the IRS has three years after the date your return is filed to assess additional taxes. If you fail to report an item of income which is more than 25% of the gross income you reported on your tax return, then the IRS has six years after the return is filed to assess additional taxes. If the IRS can prove a fraudulent return was filed, then there is no time limit to assess additional taxes.

If the IRS can prove that a false or fraudulent tax return was originally filed with the intent to evade taxes, then there is no limitation on when the return is audited or when the tax may be assessed.

Yes. There are different penalty and interest calculations incurred for not filing timely, not paying and not paying timely, or when a balance due exists. You will want to avoid the failure to file by the due date when a balance due exists penalty. Therefore, file the tax return by the current years due date, April 15th 20XX, and pay whatever you can at that point in time to minimize your total penalty and interest calculations.

In the case of an individual, if the tax liability after certain credits and after subtracting federal withholding is more than $1,000, then a penalty for the underpayment of taxes is applicable. Penalties are figured separately for each of the four payment periods. Form 2210 is used to calculate the underpayment penalty. There are exceptions and waivers available that can be used to minimize or alleviate the penalty. Speak to your local CPA about the exceptions and waivers to minimize your penalty due. There are similar estimate payment requirements and penalty ramifications for corporations.

Taxpayers with AGI under $150,000 (75,000 MFS) will have to pay 100% of their prior tax bill by the end of the year, Taxpayers with AGI over $150,000 (75,000 MFS) will have to pay 110% of their prior tax bill by the end of the year or 90% of the current year tax to avoid an underestimated tax penalty.

Basically, you will have to file an amended return (IRS Form 1040X)to include or exclude items of income or expenses that you didn’t include on the return already filed. If you know you are waiting for some information, do not file your return on 4/15/XX.) You are entitled to a six month extension to file(not to pay). Try to avoid filing amended returns. They are subject to additional scrutiny by the IRS.