As per current laws, if someone files their taxes late, then there are consequences that they may have to face. The consequences may include a late filing penalty, late payment penalty, and interest on unpaid taxes.
Late Filing Penalty:
The late filing penalty is assessed on the total amount due in taxes. The penalty is 5% of the unpaid taxes for each month that the tax return is late, up to a maximum penalty of 25% of the unpaid taxes.
Late Payment Penalty:
The late payment penalty is assessed on the tax amount that is not paid by the due date. The penalty is 0.5% of the unpaid taxes for each month that the tax remains unpaid, up to a maximum penalty of 25% of the unpaid taxes.
Interest on Unpaid Taxes:
Interest is charged on any unpaid tax amount from the due date of the tax return until the taxes are paid in full. The current interest rate is 3% per year, compounded daily.
It is important to note that there may be exceptions and limitations to these penalties and interest rates, depending on the specific circumstances of the late filing. For example, if the late filing was due to a reasonable cause or uncontrollable circumstances, the penalties may be waived or reduced.
If someone has filed their taxes late and has been assessed with penalties and interest, they should take immediate action to pay the taxes owed and request a penalty abatement or reduction if they believe they have reasonable cause for the late filing.
It is important to seek the advice of a licensed attorney or tax professional in situations where significant penalties are at stake or a complex legal issue is involved.
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