IRS Offers Solutions to Untimely Return Filers

IRS attorneys report that tax-filing extensions are now available if you need more time to finish your unfiled returns. IRS tax lawyers are quick to point out these are extensions of time to file; not extensions of time to pay. Taxpayers who are having trouble paying what they owe may qualify for payment plans and other possible relief (i.e. offer in compromise). Last month, for example, IRS attorneys say the IRS, as part of its Fresh Start initiative announced penalty relief for unemployed taxpayers and self-employed individuals whose income has dropped.

People who have unfiled returns can get an automatic six-month extension. According to IRS attorneys the fastest and easiest way to get the extra time is through the Free File link on In a matter of minutes, anyone can use this free service to electronically request an automatic tax-filing extension on Form 4868. IRS tax attorneys state that filing this form gives taxpayers until Oct. 15th to complete their returns. To get the extension, IRS lawyers say that taxpayers must estimate their tax liability on this form and should also pay any amount due.

By properly filing this form, IRS attorneys say that a taxpayer can avoid the late-filing penalty, normally (5%) per month based on the unpaid balance that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 17th. The current interest rate is (3%) per year, compounded daily, and the late-payment penalty is normally (.5%) per month.

Besides the Free File link, IRS lawyers say that taxpayers can choose to request an extension through a paid tax preparer, using tax-preparation software or by filing a paper Form 4868, available on According to some IRS attorneys, of the 10.5 million extension forms received by the IRS in 2011, about 4 million were filed electronically.

IRS tax lawyers caution that some taxpayers get more time to file without having to ask for it. These taxpayers include taxpayers living abroad; U.S. citizens and resident aliens who live and work abroad, as well as members of the military on duty outside the U.S.; Members of the military and others serving in Iraq, Afghanistan or other combat zone localities (for details, see Extensions of Deadlines in Publication 3, Armed Forces Tax Guide); and people affected by certain tornadoes, severe storms, floods and other recent natural disasters. Currently, parts of Indiana, Kentucky, Tennessee and West Virginia are covered by federal disaster declarations, and affected individuals and businesses in these areas have until May 31 to file and pay.

Ultimately, IRS tax attorneys uniformly agree that getting your unfiled tax returns completed and filed in a timely fashion saves you both money and headaches. But if for whatever reason you can’t get the returns done in time, or can’t afford to pay what you owe, consider all your other options rather than just ignoring your tax obligations.


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