Questions 1-4 are about Extensions to File Your Tax Return.

1. Form ____________ allows you to request an extension to file your tax return.

2. Generally, what is the due date to file the Extension to File form for your taxes? Give the month and day. (For this question, ignore the CARES Act.) ________________

3. If you obtain an extension to file your federal tax return, what is the new due date of your return? Give the month and day. __________________________

4. Does an extension to file also allow an extension to pay your balance due? _______________

5. Does an extension to file waive the interest that accrues on a balance due? ______________

For Questions 6-8, use the Penalties handout, and do a search for Common Penalties for Individuals on the website www.irs.gov.

6. The Failure to File penalty is ________% of the tax due per _______________ that the return is filed late, up to ______ months.

7. The Failure to Pay (late payment) penalty is generally ___________% of the tax due per _____________ that the tax is not paid by the regular due date of the return. The maximum Failure to Pay penalty is ________%.

8. The Failure to Pay penalty will not be charged if you file a(n) ______________________, pay at least ________% of the total tax on the return by the regular due date and pay the remaining balance by the __________________________ date.

For Questions 9-13, use the Instructions for Form 9465.

9. Use Form 9465 if you are requesting a(n) ____________________________________ because you cant pay the full amount due on your tax return or notice sent to you.

10. You are eligible for a guaranteed installment agreement if:

• the tax you owe is not more than $_________________;
• during the past ______ tax years, you (and your spouse if filing a joint return) have timely filed all __________________________________ and paid any income tax due;
• you have not entered into an ____________________________________ for the payment of income tax;
• you agree to pay the full amount you owe within_______ years and to comply with the tax laws while the agreement is in effect; AND
• you are financially _____________________ to pay the liability in full when due.

11. Identify the user fee for setting up an installment agreement if:

(a) you use the online payment application and you pay by direct debit: $__________________

(b) you use the online payment application and you pay by check: $_________________

(c) you dont use the online payment application and you pay by direct debit: $_____________

(d) you dont use the online payment application and you pay by check: $____________

12. You can avoid the user fee to set up an installment agreement if you can pay the entire balance due within _______________ days. To apply for this short-term payment plan, you can call the IRS or use the online payment agreement application at the website ________________________.

13. What is the reduced installment agreement user fee for low-income taxpayers? $________

For Questions 14-19, use Form 13844.

14. Form 13844 is the Application for _________________________________ for Installment Agreements.

15. To qualify for a waiver of the reduced user fee, a low-income taxpayer must agree to what payment method? _______________________

16. If a low-income taxpayer is unable to make payments by direct debit, then the taxpayer must pay the reduced user fee but will get reimbursed upon completion of the _________________________________________________.

17. A low-income taxpayer is defined as a person whose AGI for the most recent tax year available is at or below ________________% of the federal poverty level.

18. According to Form 13844, if you live in Massachusetts and your family size is 3, then you are low-income if your AGI is below $______________________.

19. A low-income taxpayer must submit the certification portion of the Form 13844 within ________ days from the date of the Installment Agreement Acceptance Letter.

For Questions 20-22, use Pub 4012, Tab K, Balance Due Returns.

20. According to Pub 4012, Tab K, what are the 7 payment methods for balances due?

______________, ______________, ______________, ______________, ______________, ______________, ______________

21. A W-2 taxpayer wants to avoid owing taxes next year. The taxpayer should fill out a new Form _________ and submit to his/her employer.

22. A 1099-MISC taxpayer wants to avoid owing taxes next year. The taxpayer should fill out a Form _____________, Estimated Tax for Individuals, and submit it with a payment.

WHAT WOULD YOU DO?

23. The taxpayer thinks he will owe taxes and wants to know if he should file his tax return EARLY or LATER in the tax season. What would be your advice to the taxpayer, and why?