top of page


  • Daniel Rodriguez

What Should I Do if I Owe Money to the IRS?

Did you file for a tax extension back in April that provided an additional six months for you to file your taxes? At the time it may have seemed as if the October deadline by which you would need to file your tax return was ages away. But summer has come and gone and the October deadline for those who had previously filed for income tax return extensions is upon us.

However, some individuals may be surprised to learn that filing IRS form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, merely extended the amount of time that the taxpayer had to file. If the taxpayer owed money to the IRS, he or she was required to make sufficient payment by the original tax filing deadline in April. The failure to make a sufficient, required payment by the original tax deadline can result in penalties and interest.

Thus, many taxpayers may soon be surprised to learn that they do indeed owe money to the IRS. In many cases, the amount owed may be significantly greater than expected. If you are concerned about unfiled taxes, unpaid taxes, tax penalties, or interest on unpaid taxes, the Roseville unfiled tax return attorneys of the NewPoint Law Group, LLP may be able to help. To schedule a confidential consultation, please call 800-358-0305.

Tax Debt Option #1:  Pay as Soon as Possible and Avoid Additional Failure to Pay Penalties

Many people are also unaware that separate penalties exist for a failure to file taxes and for a failure to pay taxes. When applicable, both penalties can apply. However,  The failure to pay penalty is assessed at .05% of the amount owed. This penalty is assessed for each month or partial month where the tax remains unpaid despite an obligation to be paid in full. For instance, a failure to pay by the original tax deadline now results in seven months of penalties (penalties assessed for the full months of  May, June, July, August, and September. Penalties also assessed for the partial months of April and September). In addition, the IRS’s current interest rate of 4 percent will also apply.

Clearly, it is in your best interest to pay as quickly as possible. If you are able to pay the entire balance off within 120 days, it may be wise to apply for additional time to pay on the IRS’s Online Payment Agreement application. This relief is only available to individuals who owe $50,000 or less in combined tax, penalties and interest, and who filed all required tax returns. It is important to note that penalties and interest will continue to accrue during the 120-day extension of time to pay.

Tax Debt Option #2: Seek a Tax Payment Installment Agreement

If your situation is too complex to be handled within several months, it may make sense to explore a payment plan or installment agreement. Setting up a payment plan of this type can permit a taxpayer to minimize or eliminate penalties and interest assessed. Taxpayers can work with a tax lawyer or other tax professional to negotiate an installment agreement with the IRS.  This can be accomplished by completing and filing  IRS Form 9465, Installment Agreement Request and IRS Form 433-F, Collection Information Statement.

Tax Debt Option #3: Seek Tax Debt Relief from the IRS

If you believe that you cannot pay the tax debt without experiencing a significant hardship or that the IRS made a mistake, you may be able to petition for tax relief.

If you believe that the tax debt was not your fault and was the product of a former spouse’s actions , it may make sense to petition for innocent spouse relief Innocent spouse relief can protect the innocent spouse from the imposition of fines and penalties due to the acts of a single spouse. In situations where the payment of the penalty would constitute a severe hardship, an offer-in-compromise may allow a taxpayer to settle his or her tax debt at a significant discount. However, whether the IRS accepts an offer is contingent upon one’s reasonable collection professional. An experienced tax attorney can assist taxpayers in making a reasonable offer that contemplates reasonable collection potential.

Finally, if you believe that the IRS has made a mistake or error that resulted in inapplicable fines and penalties, you may seek relief through a tax appeal. The IRS and federal courts offer a number of appeal options. That being said, taxpayers should always consult with a lawyer prior to filing because certain appeals options can limit your ability to seek subsequent relief.

Tax Debt Concerns? Work with a Roseville Tax Lawyer

If you are concerned about unpaid taxes, contacting a tax professional is often the first step in addressing these concerns. A failure to engage with the IRS typically results in ever-increasing interest and penalties. To discuss your options to deal with unpaid taxes, call NewPoint Law Group, LLP at 800-358-0305 today.

Recent Posts

See All

How does a section 1031 like-kind exchange work?

In California and other states, if you plan on selling a business or investment property and have already identified a replacement property, the Internal Revenue Service (IRS) allows you to defer capi

What is an Offer in Compromise in California?

An offer in compromise (OIC) is a deal between a California taxpayer and the Internal Revenue Service (IRS) or the Franchise Tax Board (FTB) to pay off a tax debt for less than the full amount. The ag


Sacramento form background.jpg

Connect with an Attorney

Your business deserves a legal partner that not only understands your current needs but is also equipped to evolve with you. NewPoint Law Group is ready to be that partner, ensuring that at every milestone, your legal foundation is as robust and forward-thinking as your business itself.

Embark on Your Legal Journey with NewPoint Law Group

bottom of page