You arrive at your office one morning and there’s a note on your desk. Your secretary, or another staff member, forgot to mail in a tax form and now it’s late. This isn’t good news, but it’s not the end of the world, either. Mail in the tax form immediately, as the sooner the IRS gets it, the better. While the IRS will likely assess penalties if you owe money, you are in a much better situation by mailing the form in as soon as you realize it is late. Whatever penalties they assess, you will receive notice of.
However, if you receive a notice from the IRS stating your tax form was never filed, you may have more of a problem. If this happens, you need to do the following:
First, determine exactly which form is missing and for which period. Go through your records to try to find the form, and if you find it – that’s great. Mail it in, and realize the IRS will likely assess penalties, especially if you owe money.
What type of penalties? If you owe money, and your tax forms are late, you could be assessed with a 5 percent penalty per month of the amount due, up to 25 percent. This can add up fast, so the best thing you can do is get that tax form in as soon as possible, and pay the amount you owe. If you know you are going to miss a deadline, and you know you owe money, see if you can file an extension. You still owe the money, and you should try to pay at least 90 percent of what you owe, but the penalties will be less.
If, on the other hand, you are unable to find the missing tax form, this may mean that it was mailed to the IRS and it was lost – either in the postal service or within the IRS. If there was a balance due on this tax form, you can ascertain that a check was cut for that amount, and if so, you can see if that check has cleared your bank.
Assuming your check has cleared the bank, this is good news. You will want to contact the IRS with this information. When you write the letter to the IRS, include a copy of the original form, plus proof that the check cleared your bank. This should take care of the matter for you, with no penalties. You may want to check in with your accountant to be sure you’re not missing anything, before you mail in the tax form and letter.
Missing a tax deadline is not necessarily a catastrophe, but every scenario is different. The best advice is to discuss any issues with the IRS with your tax professional. They will be able to help you plan the best way to minimize penalties and other fees, and they will be able to contact the IRS on your behalf.