FEBRUARY 17, 1997
Can't pay, file anyway
Don't let a shrinking wallet turn into a late federal income tax return. The results could make that wallet even emptier. Once people get behind in their taxes, they often continue to put off filing. But the IRS says that is the worst move a person could make. Although there are penalties and interest for paying late, the penalties for failing to file in the first place are much larger. With each return not filed, the debt piles up. By the time IRS comes looking for the taxpayer, the amount owed may be overwhelming.
To avoid penalty and interest charges, people should pay their tax liability in full. Those who cannot afford to pay what they owe should contact the IRS to discuss payment options such as installment payments and offers to settle their tax account for less than the amount owed. However, the offer must be in the best interest of both the person and the government.
The bottom line is that it's always better to file and, if necessary, make arrangements to pay rather than waiting for IRS to enforce the tax laws. Consequences for not filing returns or answering IRS letters can range up to an IRS lien against property or, in worst cases, criminal charges.
The IRS has information on the rights taxpayers have when dealing with the IRS and the collection process, how it affects them, and where to go for help if a problem can't get resolved. Details on these topics are covered in Publication 1, Your Rights As a Taxpayer (Publication 1SP, Derechos del Contribuyente, in Spanish), and Publication 594, Understanding the Collection Process (Publication 594SP, Comprendiendo el Proceso de Cobro). Call 1-800-829-3676 for copies.