What are the penalties for not filing back taxes because of incarceration?

[ColeenD3 · Accepted solution]

It doesn't matter why you did not file.

There are two potential penalties; late filing and underpayment.

• Late filing penalties apply if you owe taxes and didn't file your return or extension by April 15, of the year in question, or if you filed an extension but failed to file your return by October 15 of that same year.
  • The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%.
  • If you file more than 60 days after the due date, the minimum penalty is $210 or 100% of your unpaid tax, whichever is less.
• Late payment penalties apply if you didn't pay taxes owed by April 15, of the year in question, regardless of whether you filed an extension or not.
  • The late payment penalty is 0.5% (1/2 of 1%) of the additional tax owed amount for every month (or fraction thereof) the owed tax remains unpaid, up to a maximum of 25%.
  • For any month(s) in which both the late-payment and late-filing penalties apply, the 0.5% late-payment penalty is waived.