Facing the prospect of owing money at tax time is always about as pleasant as a root canal. But rising prices for gasoline and other staples...
Facing the prospect of owing money at tax time is always about as pleasant as a root canal.
But rising prices for gasoline and other staples and declining home prices make this year’s tax season seem particularly cruel.
Many taxpayers have an extra incentive to file this year: They will get a rebate as part of the government’s economic stimulus plan, with checks going out in May.
If that’s not reason enough, Robert Brennan, who formerly dealt with delinquent taxpayers for the IRS, says it’s inevitable that non-filers will be tracked down.
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“Under all conditions, you’d want to file the return,” says Brennan, now director of criminal and civil tax investigations for CBIZ Accounting, Tax & Advisory Services.
“By not filing the form, you’re incurring a 5 percent penalty for every month you don’t file on the outstanding balance.”
Jeffrey Baer, a certified public accountant in Grayslake, Ill., near Chicago, notes that the government will often work with taxpayers to set up an installment agreement if they can’t pay outright.
If the amount owed is less than $10,000, taxpayers can attach Form 9465 to their return and indicate how much they propose to pay per month over up to five years.
For amounts between $10,000 and $25,000, a similar request can be made, but the IRS has more of a say.
Over $25,000, “that’s when they get very serious — they dictate to you,” Brennan says.