Tardy taxpayers may get late rebates

The IRS offers two types of payment agreements. A short-term extension generally requires full payment within 120 days. A monthly plan, or installment agreement, can be set up online for taxpayers who owe less than $25,000 and are able to pay the balance within 60 months. Fees and interest are charged.

Taxpayers can determine if they're eligible by going to the IRS Web site at http://www.irs.gov and clicking on the Online Payment Agreement link or by calling 800-829-1040.

There's a steeper penalty for failure to file than there is for failure to pay, but both can be costly for the taxpayer.

The penalty for not filing is 5 percent of the unpaid taxes for each month that a return is late, up to 25 percent.

The failure-to-pay penalty is 0.5 percent of unpaid taxes per month. It doesn't apply during the automatic six-month extension period if the taxpayer has paid at least 90 percent of his or her tax liability by April 15. Interest is charged, too, currently at a rate of 6 percent, according to the IRS.

Some Americans get automatic extensions to file:

• U.S. citizens living outside the United States and Puerto Rico have an extra two months to file their federal returns.
• Members of the military serving in Iraq, Afghanistan and other combat zone localities generally can delay filing until 180 days after the soldier leaves the combat zone.
• In some designated disaster areas, where residents have been harmed by hurricanes or tornadoes, there can be announced extensions. This year, residents in parts of Illinois, Georgia, Missouri and Arkansas affected by floods and storms have filing and payment deadlines in May.
• For the record, the IRS also charges a fee if a taxpayer's check bounces — 2 percent of the face value of the check or $25, whichever is less.

MORE FROM TAX TACTICS

Tax Tactics Section Front

Foreign account tax amnesty deadline extended IRS rules for medical deductions are sickening Preparing for the unknown: Higher taxes Under plans, tax on the richest set to rise Deficit can lead to more IRS audits, experts say Large tax bill looms for Jackson estate Small businesses get a ‘tax break,’ for now Start thinking 2009 taxes now Obama vows to simplify the tax code If you can’t pay your taxes, don’t hide from IRS Tax Tactics Section Front   Add Tax Tactics headlines to your news reader: