Tags: Accuracy Related Penalty, Failure to File Penalty, Failure to Pay Penalty, IRS Penalties, IRS Penalty Attorney, IRS Penalty Lawyer, IRS Penalty Reduction, Penalty Abatement, Removal of IRS Penalties, Tax Penalties, Tax Penalty Attorney
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- Penalty for failure to timely file return. The IRS may impose a penalty on you if you fail to file your tax return on or before the due date. The amount imposed as a penalty will vary from taxpayer to taxpayer, because it is based on the amount of tax on your return and how late your taxes were filed. There is a heightened penalty if the IRS considers your failure to file fraudulent – that is, if you are purposefully not filing returns in order to avoid paying taxes.
- Penalty for failure to timely pay. The IRS may also impose a penalty if you timely file your taxes but fail to pay any outstanding taxes on or before the due date. You could also be assessed a failure to pay penalty if the IRS determines you owe more taxes than what was calculated on your return, and you fail to pay the new amount of the tax the IRS has assessed by the due date. As with the failure to file penalty, the amount of the failure to pay penalty will vary from taxpayer to taxpayer based on the amount owed.
- Penalty for accuracy-related issues. The IRS also imposes penalties against taxpayers for issues that will render a taxpayer’s return inaccurate, including:
- Negligence or disregard of rules and regulations;
- Substantial understatement of income tax;
- Substantial valuation misstatement;
- Substantial overstatement of pension liabilities; and
- Substantial estate or gift tax valuation understatement.
- Trust Fund Recovery Penalty. This is a penalty imposed against payers required to collect, account, and deposit quarterly employment taxes. If you are responsible for these tasks and willfully fail to perform them, the IRS will impose a penalty under IRC Section 6672.
- The presence of a specific incident or event that prevented the taxpayer from complying with the rules;
- How long the taxpayer waited to comply with the rules and any efforts made to comply with the rules; and
- The taxpayer’s past history of compliance.
If you are a Washington taxpayer and would like to discuss whether a penalty abatement may be a good option for you to pursue, contact Insight Law for a free consultation with a local tax attorney. Call (206) 397-4780, or click the Tax Attorney link below to visit our website.
Author: Amanda Stach