Collections and Liens

  • Filing Late – If you do not file your return by the due date, including extensions, you may have to pay a failure-to file penalty. The penalty is usually 5 percent for each month or part of a month that a return is late, but not more than 25 percent. The penalty is based on the tax not paid by the due date without regard to extensions.
  • Return over 60 days late. – If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
  • Paying tax late. –In addition to the failure-to-file penalty, you will have to pay a failure-to-file penalty, you will have to pay a failure-to-pay penalty of 5 percent of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid and this penalty is not capped.
  • K-1 Late Filing Penalty. – Penalties are $195 per partner (shareholders), per month for 12 months.


Notice of Federal Tax Lien

If the taxpayer owes money to other creditors, they may also hold liensor secured rights against a taxpayer’s assets. By filing the Notice of Federal Tax Lien, other creditors are put on notice that the United States government has a claim against all property, and any rights to property, of the taxpayer.