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Posted On January 30, 2018
Is it ever acceptable to not pay my taxes on time?

Is it ever acceptable to not pay my taxes on time?

Sometime tax payers fail to file their returns—or pay the amount they owe in taxes—by the deadline. Today we examine common instances under which this behavior may not be subject to a penalty.

The IRS may forego a penalty for late filing or late payment if you have what is known as “reasonable cause.” If you were hospitalized for an extended period of time, you may have been unable to file your return. If certain events led to financial hardship, you may have been unable to pay your taxes. Under such conditions, the IRS may elect to reduce or remove your tardiness penalty.

Common claims for reasonable cause include:

  • Severe illness, incapacitation or death of either the tax payer or a member of their family
  • Natural disaster (e.g., fire, hurricane)
  • Unavailable records

The IRS will examine each case individually and use its discretion in determining whether your circumstances meet the criteria for reasonable cause. It is worth noting that having insufficient funds to pay your taxes is not grounds for reasonable cause in and of itself. However, if the IRS determines that the reason for your limited funds falls under the protection of reasonable cause, then it may grant lenience on late payment.

In order to establish a case for reasonable cause, you need to provide a complete background on the issue in question. What happened and when? What did you do to try to remedy the situation? How does this situation relate to your inability to pay or file taxes? Provide any relevant supporting evidence, such as hospital records or documentation of a disaster.

If you believe you have reasonable cause for neglecting to file or pay your taxes, an experienced tax attorney can advise you on how to build a convincing case for the IRS.