IRS Interest and Penalty. What you need to know?

Generally IRS charges below penalties. Refer notice 746, information about your notice, penalty and interest.

1. Failure to file – you didn't file your tax return by the return due date or extended due date if an extension to file is requested and approved.
2. Failure to pay – you didn't pay the taxes reported on your tax return in full by the due date of the original tax return. An extension to file doesn't extend the time to pay so you must pay your taxes by the original due date of the tax return even if you have requested an extension of time to file your tax return. In addition, the IRS may charge a failure to pay penalty if the IRS sends a request for payment and you fail to pay on time.
3. Failure to pay proper estimated tax – you didn't pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required.
4. Bad check – your bank doesn't honor your check or other form of payment.

Notice 746  : Information About Your Notice, Penalty and Interest

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/

Do You Know Failure to Pay Penalty?

As per IRC 6651(a)(2)

If a taxpayer fails to pay the tax shown as due on the return, a penalty of 0.5% per month (up to a maximum of 25%) is imposed on the tax due. The penalty amount is doubled if the taxpayer fails to pay the tax once a deficiency assessment has been made.

This penalty does not apply during the automatic 6-month extension of time to file period if at least 90% of the actual tax liability was paid in on or before the due date of the return and the balance paid when the return was filed.

If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued.

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/