Hooray, the first round of the 2014 tax reporting season is over.
Extensions have been filed and now we only need to worry about next year unless we still owe a return or owe money.
Extensions are for tax filing, not an extension to pay. If you owe money and decided to wait to file and-or pay, be aware that interest will be accruing for delayed paying.
In addition, if you owe more than $1,000 to the federal government or more than $500 to the state, a penalty may be imposed.
That amount is included on what you owe, and interest is charged on the penalty.
At the federal level, you can petition to have the penalty removed if this is the first time you owe money and are accessed a penalty.
Several of my tax clients have reported getting telephone calls from scammers claiming to be IRS agents. They give a badge number and have a Washington, D.C. telephone number. They are scammers! Do not pay.
They will ask for cash, a money order or perhaps a credit card number. Do not pay.
IRS does not make telephone calls to taxpayers. They use the U.S. Post Office to conduct business.
If you disregard letters from the IRS or do not pick up certified mail from the IRS, you might get a visit from an IRS officer who will provide proper identification.
Should one come to your door, be polite and, if you believe the individual to be a scammer, call the police. The IRS Revenue Officer will have you sign documents to close your case as he or she discusses payment arrangements.
Do not give cash or a credit card number. You can arrange payment to drop boxes established by the IRS.
In any case, only if the IRS suspects fraud or that you will be leaving the U.S. for unknown places immediately, will you get a visit regarding the current or previous return.
It is more likely that the IRS visits will only occur several years after you did not file or pay and after you have ignored their correspondence.
If you are concerned, call your tax professional for advice and help. Remember that EAs (enrolled agents), CPAs and attorneys have the authority to talk to the IRS on your behalf, but they might also charge you a fee for representation.
Or if you are willing to do it yourself, call the number on the letter, put the ringer on speaker and be prepared to wait an hour or more to talk to a live body.
Virginia Moryadas is a tax preparation professional in Bluffton.