Late Tax Filings

Late Tax Filings: What You Need to Know

Every year as April 15th approaches, people scramble to make sure that they file their taxes on time. What if you miss the date? There are many scenarios that can play out with late tax filings, and the results are completely dependent on the situation of the individual taxpayer. Here, you’ll find an abridged version of what you need to know if you’re processing a late return.


If you’re due a refund from the IRS, the April 15th date is not as hard a deadline as it may seem. Now, please don’t misunderstand – your return date for the previous year’s taxes is April 15th of the year following it. However, when the taxpayer is due a refund, they actually have three years from the due date of the taxes to request that refund. This means that for a 2015 tax return, taxpayers can request their refund up until April 15, 2019.

This also applies to claiming an Earned Income Credit (EIC). Again, it is important to remember that this only applies if you are certain you are going to receive a refund. If you owe any taxes and you file late, you may face serious fees and penalties as a result. Even though a refund can be requested after the tax due date, why wait for your refund when it can be in your hands? Try to file your taxes on or before the April 15th deadline, but if you are sure you are due a refund, you can breathe easy knowing that you do have some time to request it.

When Taxes Are Due

Late Tax Filings
Late Tax Filings

Late tax filings when taxes are due is a different scenario from the one described above. If you file a return and cannot pay the income tax due at the time of filing, that is a far different scenario than simply filing your taxes after they are due. The biggest difference between the two circumstances is the interest rate and penalties assessed to late tax filings. When paying late, the IRS can offer payment extensions from 60 – 120 days, set up an installment agreement to satisfy the taxes owed over a longer timeframe, or accept an offer in compromise.

When submitting a late tax filing, it is also important to know that the IRS can waive the late tax filing penalty based on extenuating circumstances. If you can provide reasonable cause for processing a late tax filing, the IRS will consider your reason and determine if it qualifies to waive the penalty.

Qualifications that the IRS may consider reasonable cause to waive the penalty include death of a spouse or child, chronic or severe illness of you or a close family member, natural disaster, serious financial hardship, or other extenuating circumstances beyond the taxpayer’s control. If the penalty is not waived, there are two things, in addition to interest, you are likely to encounter:


The Late Payment Penalty: assessed at 0.5% of the taxes owed per month, for as long as the taxes are outstanding. The Late Payment Penalty caps at 25% of the total amount of taxes owed. (If an Intent to Levy is issued, the rate will jump to 1% per month.)

The Late Filing Penalty is 4.5% of the taxes owed, assessed per month. Like the Late Payment Penalty, the Late Filing Penalty is not to exceed 25% of the taxes owed.

With this information alone, tax penalties have the potential to add half of the amount of the taxes owed to your total owed amount…and that does not include interest. Clearly, with these charges piling up month after month, filing late taxes can cause a serious financial burden on any taxpayer. Whenever you possibly can, you want to file your return and pay any outstanding taxes by the April 15th deadline. If for whatever reason you are not able to pay your taxes on time, the best option is to contact a knowledgeable, qualified tax attorney who will be able to help you assess your options as you move forward.

When faced with late tax filings, it is in your best interest to invest in the advice of a good tax lawyer that can assist you with navigating your individual tax situation. An experienced tax lawyer can inform you of your options and help prepare you for penalties and interest, or possibly provide you with assistance in presenting reasonable cause to the IRS. Contact today so that their experience can work for you.