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Filing Taxes Late: What Are the Penalties?

Just like not being tardy for the party, taxpayers shouldn't be filing their taxes late because latecomers are subject to penalties. These penalties are monetary and fall under either the "failure to file" or "failure to pay" category, or both, the IRS says. Here's what you need to know about late filing and payment penalties: Failure-to-File Penalties According to the IRS, failure-to-file penalties are usually more than failure-to-pay penalties. The total late-filing penalty is typically 5 percent of the tax owed for each month or part of the month that your return is late. The IRS can charge you this late-filing penalty for up to five months or up to 25 percent of your unpaid taxes. If you're late to file by more than 60 days after the due date (or extended due date), then the minimum penalty is either $135 or 100 percent of the unpaid tax. Failure-to-Pay Penalties For people who fail to pay the full amount owed by the due date, they're penalized by having to pay 0.5 percent of the tax owed each month or part of a month that the tax remains unpaid. Like the failure-to-file penalty, the maximum is 25 percent of your unpaid taxes. On the other hand, if you request an extension before the filing deadline and have paid at least 90 percent of your actual tax liability before April 15, then you won't be subject to any failure-to-pay penalties -- unless you don't pay the remaining balance by the extended due date. Avoiding Penalties The IRS exercises some leniency and won't make you pay the penalties if you can show that your failure to file or pay on time was based on a reasonable cause and not just plain neglect or laziness. If you foresee trouble paying the full amount due on time, consider negotiating an installment agreement with the IRS to pay off back taxes. To avoid these penalties, be sure to either get an extension to file or estimate the amount of taxes you owe and pay by the deadline. Even if you accidently overpay, the IRS will credit your overpayment. If you need more help, contact an experienced tax attorney in your area to figure out your legal options. Related Resources: What Are The Penalties For Failing To File Your Tax Return On Time? (Forbes) Who Doesn't Have to File Income Taxes? (FindLaw's Law and Daily Life) Running Late? Submit an Extension to File Taxes (FindLaw's Free Enterprise) 5 Weird Tax Deductions You May Be Able to Claim (FindLaw's Legally Weird)
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9/11 Crash Site Undervalued in Eminent Domain Case

The 9/11 crash site of United Flight 93 is actually worth nearly $1 million more than the federal government paid for it, according to a court ruling in an eminent domain case. A federal district judge ruled Wednesday that the site of the downed flight near Shanksville, Pennsylvania, originally valued at $610,000, was actually worth more than $1.5 million, reports the Pittsburgh Tribune-Review. The federal government scooped up the land from its owner in 2009 under eminent domain, with plans to create a national memorial at the site. But both the original owner and the feds disputed how much it was worth. Flight 93's Final Resting Place On September 11, 2001, United Flight 93 was one of four hijacked aircraft which crashed as part of a terrorist plot. Flight 93 was unique in that it missed its intended target and instead landed in a rural area of Pennsylvania, after a movie-inspiring passenger intervention. The plane's final resting place was in a field originally owned by Michael Svonavec, but the U.S. government took possession of the site in 2009 under the doctrine of eminent domain. Taking land through eminent domain requires that the government take the land for "public use" and compensate the land's owner for its fair market value. Owners have the right to challenge eminent domain actions, and typically the argument boils down to how much the land is actually worth compared to the government's compensation. In Svonavec's case, he believes his land is worth "at least $5.7 million," reports the Tribune-Review. Under this estimation, the federal government would owe Svonavec more than $5 million, but a federal judge decided differently. Commission Made Correct Valuation The "fair market value" of a piece of land with a unique character -- like historical value -- can often be difficult to pinpoint. Typically the government would approximate the land's value based on its size and comparable sales of land in the surrounding area. Perhaps this is how the government came to its original $610,000 figure to compensate Svonavec for the Flight 93 crash site. However, a court-appointed commission in December valued the property at $1,535,000 -- a finding which a federal judge upheld on Wednesday. Part of its valuation included the property's "national significance and intrinsic value," which made it unique from similar parcels of land, reports the Tribune-Review. Svonavec may be upset that he didn't get the $5 million he requested for the 9/11 crash site, but it's more than double what he originally received. Related Resources: Flight 93 memorial site correctly valued at $1.5m, judge rules (Metro) Find an Eminent Domain Lawyer in Your Area (FindLaw) Can I Lose my Property to Eminent Domain? (FindLaw's Law and Daily Life) Can Eminent Domain Actually Help My Business? (FindLaw's Free Enterprise)
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Facebook Password Lawsuit: School Settles for $70K

A Minnesota school has agreed to fork over $70,000 for demanding a sixth-grader reveal her Facebook password. Riley Stratton, now 15, painfully remembers when Minnewaska school officials cornered her over a Facebook post and threatened her with suspension, reports the Star Tribune. The confrontation ended with Stratton relinquishing her password, but thanks to the ACLU's intervention, its ultimate end was the school cutting a check. What were the legal reasons behind the school's Facebook password settlement? Right to Students' Facebook Passwords? According to an ACLU press release, the American Civil Liberties Union branch in Minnesota filed a lawsuit on Stratton's behalf in 2012 claiming that a number of her civil rights had been violated by the school demanding access to her Facebook account. The suit centered on the treatment of Stratton for conduct via Facebook performed outside of school, some of which was alleged to have been of "a sexual nature," reports the Star Tribune. Employers have been treading a legal line in asking for employees' Facebook passwords, but with the threat of cyberbullying, it seems all the more important in schools. Minnewaska Superintendent Greg Schmidt told the Star Tribune that the school just wanted "to make kids aware that their actions outside school can be detrimental." Wallace Hilke, the ACLU attorney for Stratton's case, believes that "[k]ids' use of social media is the family's business" -- not the school's. Stratton's school didn't admit any liability in the settlement, but there will be some changes in its Facebook policies. Settlement Order Promises Change Under the terms of the settlement, the Strattons agreed to drop their claims, as long as the school makes some changes regarding how it handles social media incidents. Minnewaska schools have agreed to: Require students to give up their passwords or account info to school administrators only when there is "reasonable suspicion" they will uncover a violation of school rules; Amend the student handbook to note that students are free to withhold consent to search backpacks or other items, including their Facebook accounts, without the threat of additional discipline; and Train faculty and staff on the policy changes. These changes may be a bit late for Stratton, but they may prevent other students from feeling unduly harassed by school officials about their Facebook passwords. Related Resources: ACLU wins settlement over student's Facebook post (The Associated Press) Can Schools Monitor Students on Social Media? (FindLaw's Law and Daily Life) Asking for Passwords? You May Be Asking for Trouble (FindLaw's Free Enterprise) Daughter's Facebook 'SUCK IT' Post Nixes Dad's $80K Settlement (FindLaw's Decided)
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