It's Better To File Late Than to File Later

April 15 has passed, and you didn't file your 2007 tax return.

In fact, it's been several years since you've filed a return. You're scared. You're not sure if you owe or are due a refund, but as the years go by, you just can't seem to overcome inertia.

Or you worked through your return and you know you owe money, but you didn't file because you were broke. You figure you'll file once you've saved up all the tax money. Or perhaps you're willfully not filing, hoping -- even praying -- that the Internal Revenue Service won't catch up with you.

If you fit any of these descriptions, it's better to come forward and work out a deal than to get that fateful letter laying out the hefty penalties and interest charges for not filing on time and failing to pay promptly.

"We have a saying that in the tax arena, procrastination costs," said Beanna J. Whitlock, executive director of the National Society of Tax Professionals.

The IRS can impose a number of penalties for tax scofflaws, ranging from civil fines to imprisonment for criminal tax evasion. Consider the high-profile case against actor Wesley Snipes. The government is asking that Snipes be sentenced to serve a maximum three-year prison term and pay a $5 million fine for failing to file his income taxes for three years.

If you need incentive to file, here are the various penalties that can be imposed, according to the IRS:

· If you file late without getting an extension, the failure-to-file penalty is usually 5 percent for each month or part of a month that a return is late but not more than 25 percent. The penalty is based on the tax you didn't pay by the due date.

· If you don't pay on time, you are subject to a failure-to-pay penalty of one-half of 1 percent of your unpaid taxes for each month, or part of a month.