As per the rules and regulations of the Internal Revenue Service (IRS), it is mandatory for every individual earning income to file their taxes annually. Failure to file your tax returns without any reasonable cause can lead to several penalties from the IRS.
The penalties for not filing taxes are as follows:
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Failure-to-File Penalty: If you fail to file your tax returns on or before the due date, you will be penalized 5% of the unpaid taxes on a monthly basis. This penalty increases to a maximum of 25% after five months.
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Failure-to-Pay Penalty: In case you fail to pay the taxes due, you will be charged a failure-to-pay penalty. This penalty is 0.5% per month on the unpaid taxes and can go up to 25% in total.
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Interest Rate: Interest is charged on the outstanding unpaid amounts, plus penalties. The interest rate is determined by the IRS and is subject to change on a quarterly basis.
It is important to note that the IRS can take more aggressive actions if you repeatedly fail to file your tax returns or if there is evidence of fraud. Therefore, it is recommended to file your taxes on time to avoid any further penalties and legal consequences.
If you have concerns about any potential limitations or exceptions to the advice provided or are unsure of how to proceed, it is advised that you seek the advice of a licensed attorney who can provide tailored advice to your specific situation.
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