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IRS Tax Penalties Archives

Taxpayer rights and limiting the IRS

Taxpayers in Florida may benefit from understanding more about taxpayers' rights and the federal tax laws limiting the powers of the IRS. The law affords taxpayers the right to appeal certain collection efforts that are made by IRS collection agents. In addition, taxpayers are permitted to appeal the agent's calculation of the tax amount owed to the IRS. The agency is only liable for providing taxpayers with interest payments when the arrival of the refund check is more than 45 days late.

If I pay taxes late, what penalties will I face?

Florida residents who are unable to file their tax returns on time or who underpay the taxes may be curious as to what type of penalties could be imposed. The final filing deadline is usually April 15, and taxpayers have the ability to request a six-month extension simply by filing a form. The IRS routinely grants extension requests. However, some taxpayers may not be aware that if taxes are not paid in full by the final filing date, interest and penalties accrue even if an extension is granted.

Importance of understanding willful and innocent IRS errors

It is important for Florida residents to recognize that there is a difference in potential consequences for innocent errors and willful wrongdoing on a tax return. Tax penalties may be more severe in cases of willful activity, and the potential for jail time may even exist. Experts use an amnesty program related to offshore banking as an example. This program is available to those who did not willfully err in reporting such accounts. However, a separate program would be used if the activity was purposeful.

IRS softens penalties for offshore tax evasion

A June 18 announcement by the IRS indicates that lesser penalties may be offered to those who come forward to disclose their hidden offshore accounts. According to the agency, approximately 6 million Americans live and work as expatriates. In many cases, these individuals are unaware of their requirement to pay taxes to the U.S. for foreign earnings. This may be helpful to Florida residents who previously earned income in other countries.

Divorce and taxes can be two particularly unpleasant subjects

Care needs to be taken when deciding which spouse does and does not have to pay tax liabilities during the divorce process. While transference of property as part of the divorce process will not result in tax recognition, these transactions can still have consequences when it comes to paying off future taxes.

Form 5471 could result in a $10,000 failure to file penalty

In our prior post -- as if they don’t know it already -- we reminded the readers of our Miami tax law blog that tax season is here. Residents in Florida are probably at least thinking about filing their federal tax return with the Internal Revenue Service if they haven’t done so already.

Unpaid taxes: driver's license suspension as a consequence?

When thinking about the consequences of failure to pay taxes, it is only natural to focus on the role of the IRS. After all, the IRS can seek to impose hefty tax penalties against taxpayers who don't pay up on time or work out an installment agreement or offer in compromise.

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