A Straight Dope Classic from Cecil's Storehouse of Human Knowledge

What happens if you file your income tax one day late?

April 5, 1996

Dear Cecil:

It amuses me every year at tax time when a big deal is made of the midnight mailing deadline on April 15. Does the IRS have staff whose job it is to look at postmarks? Are they going to penalize all the returns filed on April 16? I find this hard to believe. I've often been tempted to hold my return till the 16th just to see what happens. Is this all an intimidation tactic by Big Brother?

Cecil replies:

It seems vaguely treasonous to be telling you this, but you're right: It doesn't really matter if you file your return a day or two late.

Forty percent of U.S. taxpayers — 40 million people — don't file their returns until the last week. For the first few days after April 15 the IRS is still getting truckloads of returns. An IRS spokesman candidly admits there's no way they can go through all that paperwork ferreting out schnooks who filed their returns 15 minutes or even a couple of days late.

For practical purposes, if you don't owe money or the IRS owes you, you don't have to file a return at all. All penalties and interest are figured as a percentage of what you owe.  If you owe nothing the penalty for late filing is zero. No criminal sanctions, either. The IRS folks are pretty candid about admitting this too, no doubt on the theory that only a moron would fail to file if he had money coming back.

They do of course prefer that nonowers file, since the only way they can be sure you don't owe anything is to see your return. But if a nonfiling nonower decides to get right with the government and brings in a bunch of back returns, no prob, glad to have you back.

Just one thing. If you had money coming on a return you filed more than three years late, tough luck, Charlie. You just helped retire a little piece of the national debt.

If you do owe money, filing late (or never) isn't such a hot idea. Penalties, interest, and maybe even criminal sanctions apply.

Being a day or two late is no big deal, but the IRS figures a week or two is enough for even the most disorganized postal districts to get the mail where it's supposed to go. Then things start getting ugly. If you're late and you owe, the P&I clock begins ticking as of the postmark date.

But let's suppose it's April 15 and suddenly you realize: cripes, I owe two grand and I don't have enough cash to get cheese on my Whopper. What do I do? Assuming the criminal life doesn't appeal to you, file and don't pay. The penalty for not filing is a stiff 5 percent of the amount owed per month (25 percent max), whereas the penalty for not paying is only 0.5 percent per month.

Just keep the amount you owe to less than $10,000. If you do, the IRS puts you on an automatic installment plan. If it's more, you have to submit so much paperwork that the criminal life might start to look pretty good.

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