Filing taxes is a part of life for everyone, even if it is not necessarily the most pleasant experience. Every year, millions upon millions of individuals file their taxes, either expecting refunds or the not so popular necessity to pay the government. While tax time is the same each year, inevitably there are circumstances in which individuals will not file on time, if at all. Whatever the case may be, there are steps that can be taken to avoid the severity of the negative impact or IRS tax levy in other words.
Now, if there is no money owed for the year, the taxpayer will not even need to go through the hassle of filing for an extension. The IRS (Internal Revenue Service) has received their money throughout the year in this instance, and therefore it is the individual that is losing out on money. As long as the person files their taxes within 3 years, they will still receive the refund amount set by the IRS. If, however, they are completely remiss and never filed, the money will revert back into the IRS' bank accounts. It is important to claim refunds for this, and that it is against the law not to file taxes.
If for some reason it is known in advance that an individual will not be able to pay their taxes on time, they have the option of filing for an extension. An extension allows the IRS to be aware the taxpayer does indeed intend to pay their taxes. Situations that the government will grant extensions for are fairly extreme, mostly concerned with "acts of God," as in natural disasters. The IRS does consider more than just individuals and businesses that have had physical property damage, it also takes into account finances affected by these unforeseen events. The extension that is given in these outstanding circumstances is an additional six months, after which they may incur penalties and interest.
Should an individual owe taxes, and failed to qualify for an extension, interest will start to accrue on the money owed to the IRS. Because of this, the taxpayer will want to contact the IRS when the time comes to pay off the balance in full, since the percentage rate is figured on an average daily balance. What that means for the taxpayer is as soon as it is late, and as soon as interest starts accruing, it is not going to stop until the individual pays the balance. If a refund is expected the following year, the monies will be applied to the amount owed for previous years, and hopefully cover any outstanding balance. If the refund does not cover the monies owed, the interest will continue to build until the total balance with interest is paid. Also, since the interest does accrue daily, it is important for the taxpayer to contact the IRS before attempting to pay it off as the amounts will differ from day to day and this will affect the total, especially if the individual utilizes non-digital means to pay.
There are a number of ways to save yourself from the IRS tax levy, in case you have missed the deadline. However, you must not intentionally delay your taxes to avoid unnecessary hassles.