While filing your federal taxes on time is ideal, sometimes being late is unavoidable. Usually, this means dealing with fees like failure-to-file or failure-to-pay penalties. However, while you might imagine the Internal Revenue Service to be unforgiving, that isn’t always true. There are certain situations that even the IRS will accept for filing taxes late.
Prolonged Health Issue
If you have a long-term health issue, particularly chronic or mental illnesses, the IRS may waive any penalties. You can increase your odds of avoiding additional fees if your condition causes issues with either short-term memory or the ability to concentrate.
Late tax filers who want to use this excuse, should know that the IRS might ask for proof of your medical situation. Typically, this could include hospital records or a letter from a qualified physician who can attest to your health state.
An IRS Phobia
Everyone gets overwhelmed at times. If genuine feelings of anxiety make it impossible to file your taxes because of extreme fear. The IRS might be surprisingly understanding.
Like prolonged health issues, you can’t use this excuse without some real proof. Since it is mental health related, a letter from a medical professional is likely a must.
If, for example, there was a burglary and the thieves stole your computer with all of your documents, the IRS may waive any late filing-related fees. You will need something formal to present that shows you were the victim or such a crime. You should obtain a police report. Otherwise, the IRS may not accept this excuse.
Similar to stolen records, if you’ve lost tax documents in a fire or natural disaster, you might be able to get a waiver of the fees for filing late. Additionally, if a large-scale natural disaster made it impossible for you to file on time, regardless of whether you had your records available, you might also be able to file late without a penalty.
Those who have recently lost a loved one may be able to file their taxes late without a penalty. Typically, you can only cite this as a reason for not filing on time if the person who passed was a very close family member. Additionally, you might have to submit proof that the person died, like a death certificate.
Other Reasonable Causes
The IRS may waive any penalties for other reasons as well, as long as the IRS deems the cause reasonable. Note that the IRS will examine each situation on a case-by-case basis, and will carefully consider any justification for being late.
However, even if you feel the cause is reasonable, it does not mean the IRS will agree. It is ultimately the IRS’s decision.
Excuses That Will Not Work on the IRS
People have used some interesting approaches in an attempt to get out of filing their taxes or filing late. While the IRS does understand that some things in life are outside of a tax filer’s control and will try to be lenient, some excuses are practically guaranteed to fail.
For example, trying to claim that filing taxes is against your religion is not going to work. All individuals who earn an income have to file and pay any taxes owed, regardless of their religious preference.
Similarly, claiming ignorance will not do the trick either. Whether you understand the tax law is irrelevant as far as the IRS is concerned, so saying that you didn’t know what you were supposed to do is not going to get you out of any penalty fees.
You also can’t blame your tax preparer if your taxes are late. Ultimately, making sure you’ve filed your taxes on time is your responsibility, so you can’t just pass the buck because you use a person to make sure your taxes are correct.
First-Time Penalty Abatement
On a positive note, if you have never been late filing your taxes before, you may be able to get the fees waived as part of the First-Time Penalty Abatement policy. Essentially, it serves as a possible “get out of jail free” card that you can use once during your lifetime, showing that even the IRS can forgive a person for making a mistake.
However, there are some requirements. For example, you need to have no penalties for the three tax years prior, have paid or arranged to pay any taxes that were due, and otherwise be up-to-date with your filings.
Ultimately, there are some reasons that the IRS will accept as a reasonable excuse for not filing on time. But, ideally, it is better to avoid filing late in the first place. If you know you’ll be late, consider requesting an extension. If approved, you could get an additional six months to file, allowing you to avoid the failure-to-file penalty at a minimum.
Have you ever had to file your taxes late? Share your experience in the comments below.
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