Late filing of tax returns can have serious consequences for taxpayers, including penalties and interest on unpaid taxes.
In the United States, taxpayers who fail to file their tax returns by the deadline can incur a late-filing penalty of 5% per month on the unpaid taxes owed, up to a maximum of 25%. Interest is also charged on the unpaid taxes, compounded daily.
In addition to financial penalties, late filers may be subject to audits and other types of enforcement action by the Internal Revenue Service (IRS).
It is important to note that there may be exceptions and limitations to these penalties, such as for taxpayers who have a reasonable cause for filing late, or for those who are granted an extension to file by the IRS. Taxpayers who believe they may qualify for an exception or limitation should consult with a licensed tax professional or attorney.
To avoid the consequences of late filing, taxpayers should make every effort to file their tax returns on time or request an extension if necessary.
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