A prior IRS audit that did not result in any additional tax deficiency would not be a red flag for increasing your chance of another audit.
The three types of audits are field, office and correspondence. The field audit is the only audit where the IRS will come to your home or place of business.
Failure to file and fraudulent filings have NO statute of limitations.
The interest rate charged by the IRS on underpayments is the federal short-term rate plus 3%.
Larry will be assessed a late payment fee of 0.5% on the net amount of tax due not paid by the due date, with a 25% maximum. This penalty is in addition to the normal interest charge.
An estimated tax liability payment must be made when you apply for a tax filing extension on Form 4868, on or before April 15. Once the actual tax deficiency is calculated, a payment received that is 90% or less of the actual payment will be subject to a late-payment fee. Interest occurs on the tax due date, starting on April 15.
Personal FinanceKeeping thorough records and knowing the penalties make this experience easier than you'd expect.
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Personal FinanceFill out this form to get a few more months to file your tax return. But remember, April 15 is still the payment due date if you owe taxes.
Personal FinanceThese are the most common scenarios that can trigger the IRS to audit a tax return.