Tax Filing and Payment Problems

Apr 13, 2015


The Extension 

If you don’t have all the information you need to file by the tax deadline, or will be delayed for some other reason, it’s possible to receive an automatic six-month extension for filing your return. That means you will have until October to get your documentation to the IRS, but the IRS still wants you to pay the taxes you owe by the April 15 deadline, even if you receive the filing extension. Filing the appropriate forms for an extension does not extend the time to pay taxes. If you do not pay the amount due by the regular due date, you will owe interest and may be subject to penalties. Your CPA can help you determine whether an extension is a good step for you and what payment amount you may owe in the meantime. 

Don’t Fail to Pay

If you just can’t pay the taxes you owe, the IRS may be willing to work with you in this situation. It’s important to get in touch with them and discuss your options. Your CPA can explain the choices to you and work with you and the IRS to resolve the problem. Be aware that failure to file a return at all will, at a minimum, subject you to penalties. This should never be your course of action.

Payment Options

If you need just a little more time to pay, you can ask the IRS for up to 120 extra days through an Online Payment Agreement available on the IRS site, You generally don’t have to pay a fee for this arrangement, although you will owe penalties and interest for the late payment. If you need extra time to catch up, you may need an installment agreement. Under the agreement, you make monthly payments of a minimum of $25. Any future refunds for which you qualify will be used to pay off the outstanding debt. There are fees associated with an installment agreement based on your income level and how the fees are paid. You can avoid the fee if you are able to pay your total outstanding taxes within 120 days. You will still be expected to file your tax returns on time and pay all future taxes in full and on time. The IRS generally doesn't take enforcement collection actions if you are applying for an installment agreement or have one.

Get a Fresh Start

The IRS’s expanded Fresh Start initiative is aimed at people who have lost their jobs and are having trouble paying their taxes as a result. The program offers a grace period on penalties for some taxpayers who have been unemployed 30 consecutive days or longer. Self-employed people whose business income fell 25 percent or more in 2011 also may qualify. In addition, the IRS recently began offering more flexible terms to its Offer in Compromise program, with new penalty relief, a widened pool of people eligible to use streamlined installment agreements to pay back taxes, and changed lien practices. Ask your CPA for more details if you believe you may qualify.

Your CPA Can Help

If you face challenges in filing your tax return or paying your taxes due, be sure to turn to your local CPA. He or she can offer advice on all your pressing financial questions. To find a CPA in Pennsylvania by location or area of expertise, visit

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest state CPA organization in the United States.

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