Are there any other penalties the IRS imposes?

Penalty for Not Filing

• The IRS imposes a penalty of 5% of the unpaid taxes per month, up to 25% of the total tax payable, if you fail to file your tax return by the deadline.
• The least penalty if your return is more than 60 days late is $485 or 100% of the unpaid tax, whichever is lower.

Failure to Pay Penalty

• The IRS charges a 0.5% monthly penalty on the outstanding balance, up to 25%, if you file on time but fail to pay the whole sum owed.
• Unpaid taxes could also accrue interest from the IRS, which compounds daily.

Related Accuracy Penalty

• A 20% penalty on the underpaid sum could result from underpayment caused by negligence or significant understatement.

Employer’s Failure to Deposit Penalty

• Employers have to timely deposit payroll taxes.
• Depending on how late the payment is, missing a deposit could lead to fines from 2% to 15%.

Trust Fund Recovery Penalty

• Should a company neglect to pay payroll taxes, accountable people may be personally liable for all of the outstanding sum.

Estimated Tax Penalty for Underpayment

• The IRS could penalize you depending on the underpayment interest rate if you fail to pay sufficient anticipated taxes during the year.

Criminal Penalties and Fraud

• Up to 75% of the owed tax, tax fraud can result in penalties and sometimes criminal prosecution.
• For people, willful tax evasion might lead to penalties of up to $250,000; for companies, $500,000.
• Up to five years in jail may also be imposed.

Dishonored Check Charge

• Should a tax payment check bounce, the IRS penalizes 2% of the amount exceeding $1,250 or $25 if the check is under that.

Avoiding Penalties

The IRS provides payment plans for those who cannot afford to pay in full to assist them in avoiding too high fines.

Filing on time, paying due taxes, and guaranteeing accuracy in reporting help to avoid these fines.

This entry was posted on Thursday, April 3rd, 2025 at 7:13 pm and is filed under E-File Related, Tax Related Questions. 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.