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Owe taxes from 2019? Tips to reduce penalties.

On Behalf of | Apr 30, 2020 | Tax Law |

Generally, taxpayers who owe from previous tax years can file an amended return and send a check to cover the missed bill. The harm that taxpayer faces depends on the details, but generally equates to a relatively small interest penalty. Unfortunately, in light of current circumstances this generality is unlikely.

The coronavirus pandemic has led many offices to close. Government officials intend these closures, based on the guidance of medical professionals, to help reduce the risk of spreading the disease. This includes many government and judicial offices. As a result, even the Internal Revenue Service (IRS) is not operating at full capacity.

This means the agency is not processing incoming mail in a timely manner. Amended tax returns may sit in a pile of mail to get sorted and processed at a later date. In the meantime, the taxpayer who was hoping to have a minimal financial penalty could see interest added to the bill as well as additional penalties.

One potential option to avoid the problem: send the amended return through the mail but pay the IRS the owed tax bill electronically. This strategy should reduce the risk of additional penalties and fees while the amended tax return awaits processing.

Other options may be available and depend on the particulars of your situation. As a result, it may be advantageous to seek the counsel of an experienced attorney. Legal counsel with a focus in tax law issues can review your case and discuss options to come into compliance with tax law while mitigating the risk of additional penalties and fees.