It’s about to get more expensive if you fail to file your taxes.
On February 11th, the Senate passed the “Trade Facilitation and Trade Enforcement Act of 2015” by a vote of 75 to 20.
This bill contains a number of tax provisions, including stiffer penalties for failing to file returns. It also authorizes U.S. Customs and Border Protection and makes the Internet Tax Freedom Act, which bans taxes on internet access, permanent.
Under the current law, unless due to reasonable cause and not willful neglect, the minimum penalty for failure to file certain types of tax returns within 60 days of the due date (including extensions) is equal to the lesser of $135 (for 2015 and 2016) or 100% of the amount of tax required to be shown on the return. This includes income, estate and gift tax returns.
But this new law will raise that minimum penalty to $205 or 100% of the amount of tax required to be shown on the return, effective for returns required to be filed in calendar years after 2015.
The House passed this in December and it will now go to the President for his signature.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.