Dealing with taxes is something that many New York residents would rather avoid. Of course, if taxpayers do not file their returns or do not file them on time, they could face serious repercussions, typically in the form of monetary fines and penalties. In the event that a taxpayer does not file on time and does not pay owed taxes within a certain period, the IRS may start collections.
If a person fails to file his or her tax return or files after 60 days of the due day, a late filing fee will apply. That fee will either be 100% of the tax amount owed on the return that was not filed on time or $435 for late returns due on or after Jan. 1, 2020. The IRS will go with the lower amount when determining that fee. It is important to remember that the specific dollar amount fee for late returns could differ depending on when the returns were due.
Additionally, interest will accumulate on any unpaid taxes for returns that were not filed. According to the Internal Revenue Code, 5% of the unpaid taxes owed for an unfiled return will be applied each month or part of the month for up to five months. The fee is charged for a full month even if the return is less than 30 days past due.
Facing fees and other financial penalties can sometimes make it even more difficult for New York residents to pay their owed taxes. As a result, they may want to continue burying their heads in the sand in an attempt to avoid the issue. However, if the IRS begins collections, individuals may want to discuss their situations with experienced tax law attorneys to determine how they could handle their predicaments and relieve themselves of this burden.