LOS ANGELES, CALIFORNIA — Those who did not file their taxes or make their payments to the Internal Revenue Service (IRS) on April 15 were given another six months to do so. However, there are some people who still did not file or pay. Instead of ignoring the situation, William L. Abrams of Abrams Garfinkel Margolis Bergson, LLP (AGMB) says it is still possible to work out an agreement with the IRS.
According to the IRS, approximately 15 million people filed for an extension during the 2018 tax year. Usually, people are granted extensions if they can show reasonable cause for not paying on time. To prove reasonable cause, at least 90% of the balance must be paid before April 15 and the rest of the amount due is sent in with the return. Those who can prove it may have their late filing penalties waived; otherwise, if reasonable cause cannot be shown, the filer has to pay a penalty of 5% of the balance if they file late.
“If you don’t have the money, the IRS won’t come and take your house or your car,” Mr. Abrams says. “The easiest solution is to file your return and then work out a payment plan. However, you may accrue interest as a result of late payments.”
If the amount is too great, Mr. Abrams urges filers to notify the IRS immediately. “Someone will say, ‘I owe $50,000, and I don’t have the money,’” he says. “An agent will work something out with you. Just make sure that this doesn’t become a habit. There have been late filers who have chronically abused the system.”
If the return is incomplete, then an amended return can always be filed. Mr. Abrams says, when filing returns, it’s better late than never. “The worst thing you can do is not file it,” he says. “Where people get in trouble is when they don’t address the issue. If you are unsure what to do, contact an experienced tax law attorney to help you with your issues.”
Mr. Abrams is the Partner in Charge of AGMB’s tax law practice. For more information about the law firm, visit agmblaw.com.
About Abrams Garfinkel Margolis Bergson, LLP
Abrams Garfinkel Margolis Bergson, LLP is a full-service law firm dedicated to smart, practical and cost-effective counsel. The firm’s diversity of experience enables its attorneys to provide comprehensive and creative counsel to their clients. The firm counsels a vast array of clients and a variety of businesses, including banking institutions, real estate brokers, start-up and middle market companies, real estate developers, cooperatives and condominiums, trade organizations, entertainment companies, performing artists, insurance companies, personal services firms, hedge funds, wholesalers, distributors, transportation companies and product manufacturers. Abrams Garfinkel Margolis Bergson, LLP has locations in New York, New York; Los Angeles, California; and Melville, New York. For more information, visit agmblaw.com.