Tax Tips and Tidbits
- Steven R. Anderson E.A.,
- Master Tax Advisor, H&R Block, Pawling, NY
First, a public service announcement from Tax Tips and Tidbits:
The filing deadline for 2015 returns is Monday, April 18, 2016!
The extra time comes to us courtesy of President Abraham Lincoln (sort of). Each year, the District of Columbia celebrates Emancipation Day, the day President Lincoln signed the Emancipation Proclamation, on April 16th. Government offices are closed on that day. This year, April 16th falls on a Saturday, so the holiday is transferred to the Friday. That means that the IRS offices are closed on “tax day” and the due day is extended to the next business day.
This gives us an extra 3 days to file and pay our taxes, but what should you do if you have a balance due and don’t have the money to pay?
First, as we noted last week, an extension will not help.
Second, file the return! File even if you can’t send a payment. The penalty is 10 time more for failure to file than it is for failure to pay.
If you think that you will be able to pay in 60 days or less, you can call the IRS and ask for additional time to pay. That will keep them from starting any type of collection action.
Otherwise, taxpayers who owe, but can’t pay the balance in full, do have options. Often, they qualify for one of several relief programs, including the following:
- Most people can set up a payment agreement with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly payment agreement for up to 72 months. Taxpayers can choose this option even if they have not yet received a bill or notice from the IRS. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS and qualified taxpayers can avoid the filing of a Notice of Federal Tax Lien if one was not previously filed. Alternatively, taxpayers can request a payment agreement by filing Form 9465. This form can be downloaded from IRS.gov and mailed along with a tax return, bill or notice.
- Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay. This is by no means automatic, and not everyone will qualify, and not everyone who qualifies gets accepted. An Offer in Compromise is a complex and long process, and we will discuss this option in greater detail in my next Tax Tip’s and Tidbits.
With the filing season coming to an end, this will be my last weekly Tax Tips and Tidbits. I will continue to publish monthly Tax Tips over the off season (with the editor’s permission). I would like to thank Harlem Valley News for allowing me to publish these tips and tidbits this year, and I hope they have been helpful and informative.
Thanks for reading! Happy Emancipation Day!
H & R Block · 158 RT 22 Ste C2 (Hannaford Plaza), Pawling, NY 12564
Tel: (845) 855-1241 · e-Mail: standerson@hrblock.com
