Last-Minute Information for Reluctant Taxpayers

Who likes paying taxes?

Not too many people enjoy paying taxes. Even Charles M. Schulz’s Snoopy character has been used to express disinterest. In a widely shared cartoon, the beloved beagle types, “Dear IRS, I am writing to you to cancel my subscription. Please remove my name from your mailing list.” Ha ha!  If only it were that easy.

There’s still time

While paying taxes is not fun, monies collected pay for government services that support communities. Therefore, paying taxes is an important civic duty. As the April 15 tax deadline approaches, the Internal Revenue Service (IRS) reminds taxpayers that there is still time to file federal income tax returns electronically and even request direct deposit.

Here are a few other important things to know as tax season draws to a close:

Don’t ignore the tax deadline if you owe money.  If you miss the filing deadline, fail to file an extension, and you owe income tax – you are subject to a late filing penalty of 5 percent of the unpaid tax per month, plus interest. This failure to file penalty is much larger than failure to pay. Failure to pay occurs when you file your tax return on time, but you do not pay. Failure to pay is 1/2 percent per month of the unpaid tax plus interest, rather than 5 percent plus interest. So, ultimately, you are better off meeting the filing deadline. Note that if you owe taxes and cannot pay, the IRS is generally willing to work with you in good faith. Ultimately, paying what you can reduces interest and penalties. Plus, there are options for folks who truly cannot pay taxes. This may include an offer in compromise (settling your tax debt for less than you owe), asking for a temporary delay in collections (due to provable financial conditions), or seeking a review if you disagree with the information on your tax bill. Bankruptcy and other special circumstances may make some people eligible for tax relief or special consideration.

Don’t ignore filing prior tax returns if you expect a refund. One of the biggest questions people ask their tax accountants is if they will owe money or get a refund. Most hope to break even. The IRS is not shy about collecting taxes due. If you owe money, the IRS can come after you for unpaid tax debt. The IRS generally has ten years from the date your tax was assessed to collect the tax and any associated penalties and interest from you. If you owe a federal tax debt from a prior year, or a debt to another federal agency, or certain debts under state law, the IRS may go as far as offsetting part or the total of your tax refund to satisfy the debt. Per Smartasset.com, about three in four Americans receive a tax refund each year. Getting a refund might result from overpayment of taxes, tax credits, or changes in circumstances. Most tax refunds are issued within a few weeks of a taxpayer filing their return. What some people don’t realize is that if they wait too long to file, and a refund is due to them, they risk losing the refund altogether. The IRS specifies that in cases where a federal return is not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. For this year, a person must file their federal 2021 return by April 15 or any refund due will be lost. If you’ve avoided filing prior returns, the best thing to do is to get caught up asap and honor tax deadlines moving forward.

Summing it up  

This last-minute information for reluctant taxpayers is intended to provide information and motivate individuals to take taxes seriously. Most people do not like paying taxes, however the government uses tax money to finance a range of public services and institutions. Taxes pay for services like defense, infrastructure, education, public safety and more. Thus, collected taxes ultimately benefit citizens of the United States. Furthermore, it is vital for citizens to comply. The IRS is clear, “While taxpayers have the right to contest their tax liabilities in courts, taxpayers do not have the right to violate and disobey tax laws.” The IRS can vigorously apply civil and criminal sanctions, including prosecution and prison sentencing against those who violate tax laws. So, ultimately, paying taxes is a duty, requirement, and important task that citizens must not ignore.

For more information on paying federal taxes, visit https://www.irs.gov/

Disclosure: This article is purely informational and is not intended as a substitute for professional tax advice.