Information about Possible Tax Penalties


Working adults are accustomed to submitting annual tax returns. Whether you owe money to the government or are eligible for a refund, you must still file a tax return and abide by all applicable tax codes and laws. Some people do their own taxes each year, while others hire a professional. If you find yourself in a position where you may be subject to an IRS tax penalty and you don’t already have a tax professional, you should hire one immediately.

If you don’t know what the IRS’s penalties are, you could end up paying for it

Getting hit with a tax penalty from the Internal Revenue Service (IRS) can seem terrifying at first, but you can find out if you qualify for hardship relief. This may be the difference between having to pay a tax penalty of hundreds or thousands of dollars and having to pay nothing at all.

The formula used to determine fines

Should you discover that you owe a late tax penalty to the Internal Revenue Service, it is in your best interest to settle the matter without delay. Your tax preparer from will help you out and gather all the data they need to file your taxes. To the extent that you are fined for filing your tax return late, interest on the fine will begin accruing on the day that the return was originally due. As a general rule, the IRS will assess a late filing penalty of 5% per month for every month that a tax return is overdue, up to a maximum of 25% of the total amount owed.

Intriguing nuggets about the current state of interest rates

If the IRS has already assessed a tax penalty against you, you can expect the amount to change once interest is factored in. Your tax penalty is accruing interest on a daily basis at the current rate of 5% per year. There are a few things to keep in mind when dealing with the IRS’s interest and penalties. In the event that you anticipate needing more time to complete your tax return, you should contact your tax preparer as soon as possible to request an extension.

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