NEW YORK (AP) -- There are worse things than having to file your income taxes -- and one is not filing.
Financially pressed Americans might think that if they can't pay what they owe on April 15, they can buy time by not filing their tax forms. That could be a very costly mistake.
The penalty for failing to file a tax return on time is a hefty 5 percent per month on the amount owed, up to 25 percent. That could rapidly turn a tax bill of $1,000 into one of $1,250.
''Frankly, the last people I'd want to mess with are the people at the IRS -- even the kinder, gentler IRS,'' said Steve Rhode, president of Myvesta.org. ''They can attach your wages, they can put liens on your property. They are the most powerful people on the planet, besides God.''
The advice from Rhode and other experts is to file that return, and then figure out how to pay your tax as quickly as possible.
Rhode, whose credit counseling service is based in Rockville, Md., said self-employed people and independent contractors are among those most likely to have problems because they often don't set aside enough for taxes when they get paid. Others are families on tight budgets that squeak by month-to-month in part by underwithholding taxes from their paychecks.
''All they're doing is pushing their financial problems off to the future,'' Rhode said. ''Come April 15, they have to be dealt with.''
What should people do?
They can take out a personal loan or put their tax bill on a credit card. They can make a partial payment to the IRS, then pay the balance off over time. Or they can enter into a formal installment agreement with the IRS.
The IRS makes it clear up front that the government should not be the taxpayer's lender of choice. ''Before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan,'' the IRS says on its Web site at www.irs.gov.
That's because people who pay late (the IRS calls this ''failure to pay'') get hit with a penalty of 0.5 percent a month on the balance due as well as interest, currently about 7 percent, said David J. Silverman, a tax specialist in New York who is co-author of ''Taxes for Dummies.''
Those who want to pay under a formal installment agreement must file IRS Form 9465 and get IRS approval. They pay a fee of $43, but face a reduced penalty of 0.25 percent a month plus the interest, Silverman said. Some 2.2 million American taxpayers currently have such agreements, he added.
''Generally, if you ask to pay in installments and promise to clear the bill over 36 months or less, the IRS will accept,'' Silverman said. ''But you need to pay it religiously.''
Those even more hard-pressed can try to clear delinquent taxes with an ''offer in compromise,'' through which the IRS accepts less than full payment.
''These things take time to negotiate,'' Silverman said. ''The IRS demands a lot of financial records, and they don't accept all the offers.''
Offers in compromise, he added, ''are usually for people who are on in years, whose income prospects are rather bleak, or are in poor health.''
Don't think that asking for a four-month filing extension on IRS Form 4868 will buy you time to pay. Unless you make an estimated payment by April 15 that covers the taxes due, you'll owe those taxes when you file -- plus interest and penalties.
Kathy McNally, vice president for national financial literacy at the National Foundation for Credit Counseling in Silver Spring, Md., points out that the inability to pay taxes is one of the signs that a family is in financial trouble and might need professional counseling.
''Certainly it does contribute to people coming in to our offices,'' she said. ''Sometimes even a one-hour counseling session can be helpful in learning to manage money better.''
Although time is short, she said, people worried about tax bills might try in advance of April 15 to generate some cash by working overtime, taking a second job or even holding a garage sale.
At the very least, they need to adjust their tax withholding rates -- or quarterly tax payments -- to avoid problems in future years, she said.
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