Are You a Missouri resident in Debt with the IRS for Unpaid Taxes?
Have you been receiving notices from the IRS or the Missouri Department of Revenue demanding payment for unpaid taxes? Are you afraid to respond because you can’t afford to pay the amount they are asking for?
Even if you are uncertain about your ability to pay the tax owed, it’s important to take proactive steps towards resolving the situation. Don’t try to outrun the IRS. If you choose to ignore these notices, the IRS’s collection efforts will only intensify and you may eventually end up with a tax lien on your property or even a levy (seizure of funds) from your bank account. The good news is, there are debt relief options available to you.
At the Krus Law Firm, we help individual taxpayers and businesses in St. Louis, MO resolve tax debts by negotiating affordable settlements with the IRS and state tax authorities. Finding solutions to complex tax issues requires substantial knowledge of tax laws and IRS guidelines and regulations.
Gives us a call at (314) 276-4834 to schedule a free consultation. We will carefully review your financial situation and determine the best course of action for getting you back in compliance with the IRS.
Penalties for Unpaid Taxes
The consequences of unpaid taxes depend on whether your taxes are unpaid and unfiled or whether you filed taxes but have not yet paid. If you have not filed your taxes on time and owe taxes, your penalty is 10x’s greater than if you just had unpaid taxes alone.
Failure-to-File Penalty: the penalty that the IRS charges for unfiled taxes with a balance due. Charged at a rate of 5% of the tax amount owed each month with a maximum penalty of 25% of the total tax amount owed.
Failure-to-Pay Penalty: Charged at rate of 1/2 of 1% for each month the tax liability remains unpaid, up to 25% max.
Interest on Unpaid Taxes: determined by the federal short-term interest rate plus 3%. The typical interest charged is about 4% a year on unpaid taxes
Solutions for Tax Delinquencies
Installment Agreements: An agreement with the IRS that enables you to satisfy tax, interest and penalty obligations by making monthly payments. Once an installment agreement is established, the IRS cannot continue collection activities such as putting liens on property or levying wages and bank accounts.
Offers in Compromise: Allows you to settle your tax debt for less than the amount you owe.
Currently Not Collectible Status: If you are suffering a financial hardship, it may be possible to defer payment of taxes and suspend IRS collection activity until you can afford to pay.
Abatement of Penalties: If you failed to pay your taxes due to reasonable cause and not willful neglect, the IRS may agree to waive or reduce the penalties. However, you would still be expected to pay the underlying tax owed plus interest due.
Bankruptcy Tax Relief: Filing for bankruptcy may enable you to discharge a tax debt.