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Does anyone know what the penlaties are if I do not pay all of my taxes in full on the 15th?

Interest is compounded daily at a rate which is adjustable quarterly. I think it's been running 8% or 9%. Interest accrues on the entire assessed balance of tax, penalty and interest.

Failure to pay penalty starts at 1/2 percent per month, but increases to 1% per month after a "notice of intent to levy" has been issued. Failure to pay penalty is reduced to 1/4 percent per month if you enter into an installment agreement. Cumulative failure to pay is capped at 25%, and the penalty is computed only on unpaid tax.

Bottom line: reach some sort of resolution with IRS before they issue a "final" notice. If you've reached a payment agreement with them, they won't issue one if you keep it, and the penalty will be minimized.

Phil Marti
Retired IRS Collection Officer
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