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What happens if you fail to pay your quarterly IRS taxes?

On Behalf of | Jul 3, 2023 | Tax Law

Times are tough in a lot of different industries right now, and quite a few businesses are struggling with their finances – including their quarterly tax obligations.

What happens if you don’t pay? Typically, the Internal Revenue Service (IRS) is not known to be forgiving of late payments. The failure-to-pay penalty is generally 0.5% of the unpaid tax amount for each month or part of a month the tax remains unpaid. You can also end up with an “underpayment penalty” if the IRS figures you owe more than $1,000.

What should you do now?

Ideally, you want to pay as much as you can, as soon as you can. If you forgot for a day or two (or a week or two), you probably aren’t looking at a big penalty – yet. Letting it go for very long, however, will only increase your problems.

If you’re truly unable to pay what you owe, however, don’t panic. The IRS would rather have your money in small amounts than not get it at all. You can get a payment plan with the IRS, although it comes with a catch – you have to keep up with your current taxes to get a payment plan for the past-due amounts. That can put a significant strain on your finances if money is already tight.

If you’re having tax trouble, the wisest thing you can do is get some legal guidance tailored to your specific situation that can help you understand your options for resolving your tax obligations without hurting the future of your business.