Sunday, February 15, 2009

Just the FAQ'S - Notice of Assessment

I paid my tax bill late, and the IRS later sent a notice assessing large amounts of penalties and interest.  Is there anything I can do about this?

If you need more time to file your tax return, then you can file Form 4868, which will extend the due date of your return for six months (individual returns only). However, the extension for  filing your taxes is NOT an extension for paying your taxes. If you owe taxes, you must pay the tax due in full by the due date of the return, or the IRS will assess interest and penalties on the balance.

In certain circumstances, taxpayers can ask for a penalty abatement. This is where you ask for a waiver of the penalties based on what is called “reasonable cause” such as an illness or other event which prevented you from paying and/or filing on time. The IRS will waive penalties in some cases. The IRS will never abate interest unless they have made an administrative error.