Glossary

Your total income minus specific adjustments the tax code allows, before the standard or itemized deduction.

An extension the IRS grants without asking why, as long as you request it by the original deadline.

Tax you still owe after subtracting withholding, estimated payments, and credits.

An appeal you can request within 30 days of a final levy notice or a lien filing that pauses collection while it is heard.

A computer-generated IRS notice identified by a CP number in the top right corner.

A single-owner LLC that the IRS ignores for income tax purposes, so its income goes on the owner's return.

A tax practitioner licensed by the IRS to represent taxpayers before the agency, with unlimited practice rights.

Quarterly payments made during the year on income that has no withholding.

Five percent of unpaid tax for each month or part of a month a return is late, up to 25 percent, with a minimum after 60 days.

One half of one percent of unpaid tax for each month or part of a month it stays unpaid, up to 25 percent.

The interest rate on short-term federal debt, published monthly by the IRS, that underpayment interest is built on.

Administrative relief that removes failure-to-file, failure-to-pay, or failure-to-deposit penalties once for taxpayers with a clean three-year history.

The estimated tax package for individuals, with a worksheet and four payment vouchers.

The request for a Collection Due Process or equivalent hearing.

The form that computes the underpayment of estimated tax penalty and claims exceptions to it.

The application for an automatic six-month extension to file an individual income tax return.

The application for an automatic extension to file certain business, trust, and information returns.

The IRS form used to claim a refund of a penalty already paid or to request abatement of penalties or interest.

The extension request for tax-exempt organizations filing Form 990-series returns.

The installment agreement request form.

A monthly payment plan with the IRS for a balance you cannot pay at once.

The daily-compounded charge on unpaid tax and penalties from the due date until paid.

The schedule a partnership, S corporation, estate, or trust issues to each owner or beneficiary showing their share of income and deductions.

The legal seizure of wages, bank funds, or other property to satisfy a tax debt.

A legal claim against your property as security for a tax debt.

The floor on the failure-to-file penalty once a return is more than 60 days late.

The IRS letter (CP3219A or Letter 3219) that proposes additional tax and gives you 90 days to petition Tax Court.

An agreement that settles a tax debt for less than the full amount when the IRS agrees you cannot pay it.

A standard for penalty relief: you exercised ordinary business care and prudence and were still unable to comply because of circumstances beyond your control.

A payment level that protects you from the estimated tax penalty regardless of what you end up owing.

The form on which sole proprietors and single-member LLC owners report business income and expenses.

Social Security and Medicare tax paid by self-employed people on their net earnings.

The time the IRS has to assess additional tax or you have to claim a refund.

The twelve-month period a return covers.

A penalty equal to unpaid payroll taxes that the IRS can assess personally against the owners or officers responsible for paying them.

The charge for not paying enough estimated tax during the year, computed like interest on each missed installment.

Tax an employer or payer takes out of a payment and sends to the IRS on your behalf.