Failures to file and paying taxes late: What to know

In Maryland, some taxpayers may either fail to file their tax returns by the filing deadline or they may fail to pay all of the taxes that they owe when they are due. Failures to file and failures to pay may both result in penalties in addition to the balances that may be owed.

According to the Internal Revenue Service, the penalties for failing to file the tax returns on time are higher than the penalties for paying late. For each month that people are late on filing their returns, they may be assessed a 5 percent penalty for each month that they are late up to a maximum of 25 percent of their unpaid tax balances.

Failing to pay taxes that are due may result in penalties that range from 1/2 percent to 1 percent for each month that the tax payments are late. If the taxpayers file their returns late and also have failed to pay their taxes on time, the maximum penalty will be 5 percent. Finally, if the taxpayers are later than 60 days on filing their returns, they may be assessed penalties of a minimum of $135 up to 100 percent of their unpaid tax debts.

An income tax audit can be frightening for many people. People who receive notices that they have been selected for audits might want to get help from experienced tax attorneys who can represent their clients before the IRS and work to negotiate reasonable tax settlements. They might be able to secure agreements for reduced penalties and for their clients to be granted installment plans.

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