Refunds for returns filed more than 3 years late may not be honored. If don't owe taxes and instead are entitled to a refund for the calendar year for which you haven't filed a return, the IRS can withhold your refund until it receives the relevant paperwork. If you don't respond to IRS notices about your overdue taxes by paying your debt or filling out other forms to request payment plans or approved delays, the IRS may raise penalty rates and resort to tax liens, or asset and property seizure. Unpaid penalties may be charged interest in addition to interest that balances accrue. If after 5 months you still haven't paid, the failure-to-file penalty will max out, but the failure-to-pay penalty continues until the tax is paid, up to its maximum of 25% of the unpaid tax as of the due date. When both penalties are applied, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty so the combined penalties total 5% for each month the return is late. If you fail to file within 60 days of the deadline, your minimum penalty becomes the lower of $435 or 100% of the taxes you owe. The failure-to-file penalty is equal to 5% of your unpaid balance per month it goes unpaid, up until it reaches 25% of your total unpaid tax balance. If you have a tax bill, missing the extension deadline may trigger a failure-to-file penalty on top of the failure-to-pay penalty that may have been assessed earlier in the year. Remember, the deadline to pay didn't change from the original, unextended tax deadline in April. What happens if you miss the tax extension deadline depends on if you still owe taxes. There's no need to file a separate Form 4868 extension request when making an electronic payment and indicating it's for an extension. What if you miss the tax extension deadline? Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card or digital wallet.
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