Category: Tax Tips and Tricks

Key Takeaways File every unfiled tax return before pursuing an installment agreement, penalty abatement, or Offer in Compromise Choose an IRS installment agreement when you owe taxes but can manage the balance through monthly payments Request penalty abatement or an Offer in Compromise only after filing all returns and documenting financial hardship Act on every […]

Key Takeaways IRS failure-to-file penalty is usually 5% of unpaid tax per partial month. Late-payment penalties usually add 0.5% monthly, while daily compounding interest keeps growing. Form 4868 extends filing time, but tax due can still trigger penalties and interest. Refund claims usually avoid late-filing penalties, but the three-year refund rule can erase refunds. PriorTax […]

Key Takeaways IRS penalties and interest accrual continue growing on unpaid back taxes until the balance is fully resolved An Offer in Compromise is a settlement request requiring documented proof of income, assets, and ability to pay Currently Not Collectible status can suspend collection activity but requires detailed financial disclosure to qualify Ignoring an IRS […]

Key Takeaways File prior-year returns for any unfiled year, but prioritize years still inside the three-year refund deadline first Choose the six-year compliance path when IRS notices have not arrived and no collection activity is active File before the IRS finalizes a Substitute for Return to preserve deductions, credits, and accurate numbers Use an IRS […]

Key Takeaways The failure-to-file penalty charges 5% of unpaid taxes monthly, capped at 25% of the total IRS assesses a separate failure-to-pay penalty of 0.5% monthly on any outstanding balance, capped at 25% of the total Refunds carry no late-filing penalty, but the three-year refund window still closes eventually Interest accrual continues on unpaid taxes […]

Key Takeaways File immediately even without payment to avoid 5% monthly late filing penalty Request extension using Form 4868 if you need six months for paperwork only Set up installment plan via Form 9465 when you cannot pay balance in full Pursue offer in compromise if tax debt exceeds ability to pay without hardship File […]