What is the Penalty For Underpaying Taxes When Filing?

Preparing a tax return can be nerve-wracking process. You give a tax preparer your information, they input the data and ask some questions, and the software tallies your total tax bill. Sometimes that amount is larger than you can afford, and you can only partially pay the amount owed when filing your tax return. When …

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When Is the Accuracy-Related Penalty Imposed?

The IRS imposes the accuracy-related penalty when the taxpayer’s underpayment of federal taxes is due to a substantial understatement of income tax, negligence, or other errors in the tax return. The civil tax penalty is 20% of the underpayment. The main reason for implementing an accuracy-related penalty is to encourage the accurate payment and filing of …

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General Federal Tax Liens: When They Arise, What Happens, And How They Affect The Taxpayer

A lien is a charge or claim against a property for the payment of a debt. A creditor’s lien does not, by itself, transfer property ownership to the creditor. There must be a levy or seizure first to force a sale. What Is A Tax Lien ? When it comes to the government’s claim or charge …

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How The IRS Is Different Than Your Typical Creditor

When it comes to federal taxes, a creditor-debtor relationship is created between the IRS and the taxpayer. The IRS is a government creditor, and its claim against the taxpayer for unpaid taxes is a form of debt. IRS Debt Collection  Debt collection by the Internal Revenue Service is different from that of a general creditor. …

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How Long is the Duration of a General Tax Lien?

 Nothing lasts forever. The same is true with tax liens. A general tax lien exists when the assessment is made. It continues until the taxpayer satisfies the assessed amount of tax liability, or it becomes unenforceable by the lapse of time.      Duration of General Tax Liens  As stated above, an IRS tax lien becomes unenforceable …

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