Dear Taxguru,

I had my taxes prepared by a tax preparer and it appears that I owe over 10,000 dollars in taxes. I really dont have the money to pay the IRS.

I was thinking, should I file an extension to delay the liability? Can you please suggest some way out of this situation. I really was thinking that the extension would delay my liability and buy me some time to pay for the taxes.

What do you think???

Dear Roberto,

Filing an extension unfortunately does not delay your having to pay your tax liability. You should file your tax return and make every attempt to pay your outstanding tax liability.

Filing a late return or simply filing an extension is not a solution to your tax problem. The IRS will impose a late filing penalty and disregard the extension as you have not met your tax liability.

It is better to file you return on time without making a payment, than to file late. That is a fact, firstly by filing late and avoiding your tax liability, it will be very costly for you as you will incur failure to file penalty, along with penalty and interest for late payment of taxes! At least by filing on time you will avoid the failure to file penalty!!

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