2016 Tax Olympics: Best Ways to Deal With Failure to File and Failure to Pay Penalties (Day 3)

12:00 AM Jamaal Solomon 0 Comments Category :

2016 Tax Olympics: Best Ways to Deal With Failure to File and Failure to Pay Penalties (Day 3)

Nobody is perfect or exempt from life's unavoidable ups and downs. Through my experience representing many clients in front of the IRS, I have learned everyone's reason for their tax problem is unique. I heard enough stories to write an HBO series. For example, one of my clients won the lottery and immediately all hell broke loose for him. Tax problems can happen to anyone. It doesn't matter if you are extremely poor or rich. It doesn't matter if you are healthy or sick. There may be a situation that makes filing a tax return the last thing on your mind. Don't run from the IRS. Learn your options in resolving your tax problems. Below are the three best ways to handle failure to file and pay penalties:


Don't be scared to call the IRS to find out your status with them. I dealt with some clients that haven't file so long that they didn't know when they last filed. It is very easy to call the IRS to discuss your status. As a warning, you will be waiting hold for a long (long, long) time. You may find out that the IRS filed substitute tax returns for you. You can discuss your options on what is needed to get back in good standing. Most times the solution is not as bad as you feared.


Great news...there is no penalty if reasonable cause. Bad news....your reasonable cause has to be REAL good or REAL bad (it depends on how you see it).  You will not have to pay a failure-to-file or failure-to-pay penalty if you can show reasonable cause for not filing or paying on time. An example could be you had an heart attack on April 14th and couldn't file an extension. Now, don't think that the IRS will just take your "word." You better attach some type of official medical document that proves you were in the hospital on April 14th.


File your tax returns even if you can’t pay the liability.  In most cases, the failure-to-file penalty is way more than the failure-to-pay penalty. So if you can’t pay in full, you should file your tax return and pay as much as you can. You can even get into some type of installment agreement. You would be surprised on the amount of different payment options that the IRS would work with you. Running away from your problems will only make the situation worse. If you are too scared to call the IRS then hire someone else to represent you. If you can't afford an representative, locate a tax clinic for free representation. My point is DO SOMETHING!!!

Next event will be about how to not miss out on tax savings. BRING ON DAY 4!!!

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Name: Jamaal Solomon