Glossary

Filing Deadline

The filing deadline is the date by which taxpayers are required to file their federal income tax return with the IRS. For most individual taxpayers, the filing deadline is April 15 of each year, unless that date falls on a weekend or holiday, in which case the deadline is moved to the next business day.

Taxpayers who are unable to file by the deadline can request an automatic six-month extension by filing Form 4868, giving them until October 15 to file their return. However, the extension only applies to the filing of the return, not to the payment of taxes. Taxpayers must still estimate and pay any taxes owed by the original filing deadline to avoid penalties and interest.

Failing to file by the deadline can result in the Failure to File Penalty, which is 5% of the unpaid tax per month, up to 25%. Timely filing is essential to avoid penalties and ensure compliance with tax laws.

Recommendation

CP515B Notice: First Notice of Delinquent Business Return

IRS CP515B Notice notifies businesses of an unfiled return and encourages immediate action to file and avoid penalties.

CP75A Notice

The CP75A notice is sent by the IRS to request additional documentation to verify eligibility for Earned Income Credit (EIC) or other tax benefits.

First-Time Homebuyer Credit

The First-Time Homebuyer Credit provided tax relief to individuals purchasing their first home, though it is no longer available for homes purchased after 2010.

Tax Return Transcript

A tax return transcript is a document that summarizes key information from your tax return, often used for financial aid or loan applications.

CP27 Notice: Earned Income Credit Eligibility

The IRS CP27 Notice notifies taxpayers of potential eligibility for the Earned Income Credit and provides instructions on how to claim it.

CP251 Notice

The CP251 notice informs taxpayers of discrepancies between their estimated tax payments and the IRS’s records, requesting that they reconcile the differences.

Tax Refund Offset

A tax refund offset occurs when the IRS applies a taxpayer’s refund to unpaid debts, such as back taxes or student loans.

IRS Form 1099: Miscellaneous Income

IRS Form 1099 is used to report non-wage income, such as interest, dividends, or payments made to independent contractors and freelancers.

Financial Hardship

Financial hardship occurs when a taxpayer cannot pay their tax debt without affecting basic living expenses, qualifying them for relief options like CNC status.

CP259D Notice: Request for Missing Information

IRS CP259D Notice notifies taxpayers of missing information on their return, instructing them to provide details to prevent penalties.