IRS Interest Charges - What Taxpayers Need to Know
IRS Interest Charges - What Taxpayers Need to Know
By
Darrin Mish
Submitted
2009-03-27 07:57:14
If you do not pay your taxes on time, the IRS considers the money you have not paid them to be borrowed money. The IRS is required by the U.S. Congress to charge interest on your unpaid taxes. You will not only be charged penalties for not paying your taxes on time but you will also be charged interest on the unpaid taxes plus the penalties that are imposed because of late payment. By not paying your taxes or paying your taxes late, you have given yourself IRS Problems. Charging penalties and interest on unpaid taxes is supposed to be part of the punishment the IRS imposes on you for not paying your taxes on time. What happens is that the interest starts accruing from the time the tax was due, not from the time the tax was determined to be owed. This interest is charged on the entire balance, which includes whatever penalties are assessed and is compounded daily. At this rate,stivali ugg (http://www.uggsmilano.net/), it will not take long for your bill to double or even triple!It does not matter why you have late or unpaid taxes, you will still be charged interest. Even if you make a mathematical error on your tax return, interest will accrue for the amount of taxes not paid. This interest will not stop until the IRS receives full payment. The interest is compounded daily and is posted every three months. This interest rate has ranged from 4% to as high as 10% per year. One of the first steps you need to do is request a detailed penalty and interest explanation. This printout will show you: 1) a list of all your tax penalties and interest computations; 2) the dates,uggs (http://www.ugggorizia.net/), interest rates,stivali ugg 2011 (http://www.stivaliuggs.net/), any penalties assessed, and credits for payments or refunds; 3) interest and penalty charges on tax amounts; 4) penalties that were applied; 5) an account summary showing balance due which will include up-to-date penalty and interest amounts. Let our firm help you wade through this form and determine if you really do owe the penalties and interest you are being charged. Interest is usually not canceled or abated, as the IRS calls it,ugg milano (http://www.uggbootsitalia.org/), unless it was erroneously applied or is due to delays by the IRS. If you have qualified for an Offer in Compromise your interest may be reduced or eliminated altogether.