What are the IRS Penalties?

Fraud – IRC Section 6663

We charged a penalty for fraud. The penalty is 75% of the tax you didn’t pay due to fraud (50% of the tax you didn’t pay due to fraud on returns required to be filed before January 1, 1987, not including extensions).

For tax you didn’t pay due to fraud on returns required to be filed before January 1, 1989, the penalty includes an additional 50% of the interest charged on the part of your underpayment due to fraud. This additional interest charge is a penalty and you can’t deduct it from your federal taxes.

Negligence Penalty – IRC Section 6662(c)

We charged a penalty of 5% on your unpaid tax. For underpayments on returns due before January 1, 1989, not including extensions, we charge an additional 50% of the interest on the part of your underpayment due to negligence. This additional interest charge is a penalty and you can’t deduct it from your federal taxes.

Penalty for Paying Taxes Late – IRC Section 6651

We charged a penalty because you paid your taxes late. We count part of a month as a full month.  If you disagree with this penalty, see “Removal of Penalties” in this notice.  To avoid this penalty in the future, you should pay your taxes by the due date.  Even if you have an extension to file your tax return, you do not have additional time to pay your tax.

This entry was posted on Wednesday, September 9th, 2009 at 10:44 pm and is filed under IRS Interest Abatement, IRS Penalty Abatement, Income Tax Penalties, Tax Penalty Abatement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.