BAckup

Owning or managing any type of small business has the same five primary elements: employee relationships, financial management, sales development, marketing diversity, customer retention.

The IRS charges interest and penalties on quarterly bases. The period begins after April 15th of the tax year and continues until the debt is satisfied. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest is compounded daily. If you file on time but don’t pay all amounts due on time, you’ll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals who file by the return due date, the one-half of one percent rate decreases to one-quarter of one percent for any month in which an installment agreement is in effect.

If you have a tax liability and cannot afford to make the payment all at once, you are afforded the opportunity to do installment payments. The taxpayer would file form 9465 requesting an installment payment with the amount that the taxpayer can afford. Once the IRS accepts the agreement, the taxpayer will make such payments until the debt is erased. There are special rules if the taxpayer owes more than $25,000. Those taxpayers should seek professional assistance.

If your tax debt has not been addressed by you the IRS can garnish your wages and deduct fees from your personal bank account. This is why any IRS letter must be addressed in a timely manner.