IRS Penalty Fees: Find Out the Facts About IRS Penalty Charges

IRS Penalty Charges & Your Tax Debt

IRS Penalty Charges FactsMost taxpayers struggling with their tax debt are already aware that IRS penalty charges can increase the overall back tax debt. Yet, many do not understand what IRS penalty fees are or how much they are.

Like everything else having to do with taxes, IRS penalty charges are complicated. Some IRS penalty fees are based off the tax debt amount, some may increase over time, and others are a percentage of the overall tax debt that is added on monthly. Also, there are IRS penalty charges for everything from filing taxes late to tax evasion. That is why it is so important to resolve your tax debt as soon as possible in order to avoid paying not only a tax debt but an added IRS penalty charge.

Late Income Tax Return

If you fail to file your income tax return by the April 15th deadline, you are considered late by the IRS and will be subjected to the five percent late tax filing IRS penalty. This IRS penalty is added to the unpaid tax bill monthly with a maximum of 25 percent.

Late Tax Payment

Taxpayers who are given a tax bill but do not pay the balance by the deadline set by the IRS are assessed an IRS penalty charge of 0.5 percent, which is added to the tax liability. This IRS penalty charge is also capped at the maximum 25 percent of the overall tax debt.

Inaccurate Income Tax Reporting

When reporting your income on your tax returns, it is extremely important to be as accurate as possible or face an IRS penalty on the tax liability increase. For example, if your tax return assesses you have a $325 tax bill due, but the IRS adjusts your income tax, and the bill now increases to $1325; you could face an IRS penalty of 20-40 percent on the $1000 added to your IRS debt.

Tax Fraud & Tax Evasion

Intentionally defrauding the federal government or purposefully failing to file your taxes is a serious offense. The IRS will not only slap IRS penalty charges on what you owe but will also prosecute you to the fullest extent of the law. These IRS penalty and criminal charges will be placed against tax protestors as well as taxpayers with money in foreign tax shelters.

IRS Penalty Abatement

There is a way taxpayers may be able to clear some or all of the IRS penalty charges added to their back taxes, but the IRS does not extend this tax debt relief program to everyone. There are certain restrictions and requirements you must meet to even be considered for an IRS Penalty Abatement. Learn more by visiting our IRS Penalty Abatement page to see if you qualify.

Call now or fill out the form below for a free consultation about IRS Penalty charges. We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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