Late Penalties for the IRS
In most cases, individual tax returns for the previous year are due on April 15 unless an extension has been filed. If a tax return is not filed on time, an individual will incur late penalties and interest on the taxes he owes. If you have a late tax return, contact the IRS immediately to pay the balance in full or to begin a payment plan to avoid these penalties.
Failure to Pay
If you file your tax return on time but fail to pay part or all of the amount due, you will be charged interest, and you will pay a penalty. The balance that you owe the Internal Revenue Service (IRS) will be charged 3 percent interest plus a percentage determined by the federal government. This interest is compounded daily until it is paid in full. In addition, you will receive a late payment penalty equal to ½ of 1 percent of the total balance, compounded monthly. This penalty increases to 1 percent of the total balance 10 days after the IRS has issued the user a notice. This penalty will continue to compound until it has reached 25 percent of the unpaid tax balance.
Failure to File
If you have not filed your return, you will receive a penalty. For each month that you do not pay your tax, you will receive a penalty equal to 5 percent of the tax balance (which will cap at a maximum of 25 percent of your balance). Once your return is 60 days late, your penalty rises to either $100 or 100 percent of the balanced owed (whichever one is lower). Thereafter, the 5 percent tax balance penalty will continue to accumulate each month.
There is the possibility for abatement (removal and refund) of your interest fees if you are thought to have reasonable cause. Two examples of reasonable causes are that you made a banking error or made an accidental mistake on your return. No matter what the cause, abatement of the penalty and interest charges cannot be made until the tax balance is paid in full. At that point, the IRS then may consider removing your interest charges. Call the IRS at 1-800-829-1040 to get assistance with your claim.
Visitors Also Saw
Do I Have to Pay Taxes on an Inherited Annuity of My Deceased Father?IRS E-File ProcessHow to Amend Federal Tax ReturnsWhat Is the Payroll Tax Credit?Wash Sale Rules for IRA ESPP Stock GrantsWays to Use a Social Insurance NumberDo I Have to Claim a 1099-C for a Short Sale on a Home?How to Fill Out a Federal Tax CheckClaiming a Minor Child as a Dependent after a Divorce in MassachusettsTax Tips for Doctors
II. American Stores Shoping Guide