Services: Collection - Individual
IRS Collection of an Unpaid Tax Liability
INDIVIDUALS file a Form 1040 tax return, Individual Income Tax Return, annually. Form 1040 tax returns are generally due on April 15th of the following year.
Starting for tax year 2005 an automatic six-month extension of time to file is available. For this extension, you must file Form 4868 Application for Automatic Extension of Time to File U.S. Income Tax Return by the due date for filing your tax return, which is usually April 15. Remember – an extension is only an extension of time to file the tax return, not to pay the tax liability. You will still owe the IRS interest and penalties if your tax is paid after its due date.
If you are an employee who works under Form W-2, your employer withholds taxes from your pay. If you are withholding at the correct level, one typically does not have any unpaid tax liability at the end of the year on the Form 1040 tax return. Income from other sources may alter this and result in an unpaid tax liability.
If you are self-employed, you may have to make estimated tax payments on a quarterly basis. Estimated tax payments are made using the IRS estimated tax payment form Form 1040-ES, Estimated Tax for Individuals. Under Form 1040-ES, estimated tax payments are due April 15th, June 15th, September 15th and January 15th of the following year.
People that are recently self-employed often fall into a trap regarding estimated tax payments. It is very difficult to discipline oneself to make provision for making payments under the estimated tax payment form. Failure to make estimated tax payments often leads to the cycle of not filing tax returns and hiding in fear of the IRS because of the sheer amount of money owed under the accruing unpaid tax, plus any late filing penalty and interest.
If you are self-employed, we recommend the opening of a separate bank account into which regular, small deposits are made in anticipation of your estimated tax payments. We recommend that a small percentage of each self-employment check you receive be placed into the tax account.
If you have unfiled Form 1040 tax returns, are facing a failure to file penalty or Trust Fund Recovery Penalty, have received a Substitute for Return, or have unpaid taxes plus IRS interest and penalties, call us. Since 1991, Patrick T. Sheehan & Associates, Attorneys at Law, P.C. has effectively fought on behalf of his clients to resolve their individual IRS problems. Or, learn more about Collection – Business.
1-877-4-IRS-LAW