How long do i have to pay my federal income taxes?
Best Answer: The basic Failure To Pay penalty (allowable under Section 6651 of the U.S. Tax Code) is 1/2 of 1 percent per month of delinquency - which works out to about 6% per year - up to a maximum amount of 25%. If you have an installment agreement in place the penalty is reduced to 1/4 of 1 percent. If a Notice of Levy has been issued and you failed to fully pay within 10 days of the Notice, the penalty increases to 1% as described in Notice 746. Click on the first link below to pull up a copy.
If your financial situation warrants it, you CAN get the C.N.C. status (Currently Not Collectible). What this will do for you is to stop the harrassing letters and notices except for one annual reminder; however
the downsides are that penalties and interest on the taxes due plus the interest on the penalties will continue to accrue AND the IRS is going to "flag" your SSN. When they see you start earning more income they will start contacting you again.
You might want to peruse IRS Publication 594 - The Collection Process for further information. Click on the second link below to pull up an Adobe copy you can save or print out as needed.
It would be much better for you to arrange private financing to payoff the IRS now and payback the loan rather than to let the tax deficiency "fester" under the CNC status. With a private loan you will pay interest only - instead of interest, penalties and interest on the penalties.
Mike Womack, Sr. PartnerSource: answers.yahoo.com