Shopping Cart
Your Cart is Empty
There was an error with PayPalClick here to try again
CelebrateThank you for your business!You should be receiving an order confirmation from Paypal shortly.Exit Shopping Cart

Excel Tax and Consulting Services

Above and Beyond

We Have Moved!



Penalties for the Federal Taxpayer

Posted on November 11, 2015 at 10:40 AM

When the IRS or a state finds that you either should have filed a return or the return that you filed was filed in error you may be hit with a penalty.  Which penalty and how much it will add to your balance due depends on what the taxing authority finds in error on your return.

Failure to File:

This penalty is for just what it says.  If you were required to file a tax return but did not file on the due date, including extension, you may be hit with the Failure to File penalty.

  1. This is 5% of the unpaid balance per month with a maximum of 25%
  2. If it is more than 60 days late the penalty is the smaller of $135 or 100% of the tax due on the return.
  3. There is no Failure to File penalty if you are due a refund
  4. This penalty is reduced by the Failure to Pay penalty if both apply to the return.

Failure to Pay:

This penalty is for any balance due that was not paid by the due date of the return.  

  1. This is 0.5% of the unpaid balance per month to a maximum of 25%
  2. 0.25% of unpaid balance per month during the terms of an installment agreement.

Fraudulent Failure to File:

If the IRS determines that your Failure to File was due to a fraudulent act they can access a penalty of 15% of the unpaid balance per month with a maximum of 75%

Underpayment of Estimated Tax (Individuals and Corporations):

This is accessed on any individual or corporation if they do not pay enough estimated taxes into the government.  The rates change for inflation.  For corporations the rate also changes due to the amount of the underpayment.

Accuracy Related Penalty:

This is a 20% of the underpayment due to:

  1. Negligence
  2. Substantial understatement of tax
  3. Substantial valuation misstatement


If the IRS determines that you filed a fraudulent return there is a 75% of the understatement penalty due to the fraud.

Frivolous Tax Court Suits:

There is up to a $25,000 for the intentional delay, frivolous or groundless positions, and failure to pursue available administrative remedies to a tax issue.

Tax Evasion:

If you are hit with this, it is considered a willful attempt to evade tax and is a felony.  Maximum fine is $250,000 ($500,000 for corporations) and/or up to 5 years in prison.

Failure to Collect or Pay Over Tax:

Willful failure to collect, account for, and pay over tax is a felony with a maximum fine of $250,000 ($500,000 for corporations) and/or up to 5 years in prison.  These include payroll taxes for your employees that you have in a trust fund account.

Perjury and Fraud:

If you knowingly file or help file a false return or aid in the fraud, it is considered a felony.  This also carries a maximum fine of $250,000 ($500,000 for corporations).  The jail time can be added to include up to 3 years.

Earned Income Credit Claimed When Not Eligible:

  1. If the error is due to recklessor intentional disregard for the rules.  The taxpayer is not allowed to take the credit for 2 years even when they are eligible for the credit.
  2. If the error is due to fraud.  The taxpayer is not allowed to take the credit for 10 years, even if eligible.

As you can see there are many ways to be hit with a penalty on your tax return.  All of the penalties and amounts listed above are at the Federal level.  Each state has their own rates and penalties to consider.  It is always better to excercise the laws when filing your tax return then to be hit with any penalties at a later date.  The IRS can levy your home and business as well as garnish your wages until the unpaid amounts are paid in full.  My advice is to do your research, hire a knowledgeable tax preparer, or know that laws BEFORE filing your own return.  Getting out of a tax mess is more expensive then staying out of a tax mess to begin with!

There is a way to mitigate the noncriminal penalties.  This is can be done with "Reasonable Cause".  Reasonable cause is based on the facts and circumstances in each case.  Any reason that establishes that a taxpayer exercised ordinary care and prudence but still failed to comply with the tax law may be considered for relief.  

For more information on penalties see the IRS website and publication 17" target="_blank">http://

Categories: Penalties, Federal Taxes, Taxes

Post a Comment


Oops, you forgot something.


The words you entered did not match the given text. Please try again.


Reply XRumerTest
9:03 PM on March 16, 2017 
Hello. And Bye.
Reply XRumerTest
7:59 AM on March 21, 2017 
Hello. And Bye.
Reply ландÑ?аÑ?Ñ?нÑ?й дизайн
4:32 AM on May 18, 2017 
СмоÑ?Ñ?иÑ?е лÑ?Ñ?Ñ?е здеÑ�Ñ?:
ландÑ?аÑ?Ñ?нÑ?й дизайн (Julie)
ландÑ?аÑ?Ñ?нÑ?й дизайн,,

ландÑ?аÑ?Ñ?нÑ?й дизайн (Julie)
ландÑ?аÑ?Ñ?нÑ?й дизайн (Julie)
ландÑ?аÑ?Ñ?нÑ?й дизайн
ландÑ?аÑ?Ñ?нÑ?й дизайн [Julie]
Reply kd shoes
3:47 PM on July 11, 2020 
I have to convey my gratitude for your generosity supporting women who really want guidance on that subject matter. Your very own commitment to getting the message all around appears to be really beneficial and have regularly helped many people just like me to arrive at their endeavors. This insightful hints and tips indicates a great deal a person like me and even more to my office workers. Thanks a ton; from everyone of us.
kd shoes
Reply supreme
10:10 PM on July 13, 2020 
I precisely needed to thank you very much once more. I am not sure the things I would've accomplished in the absence of the tricks provided by you concerning my industry. It was a real depressing crisis in my circumstances, nevertheless finding out a new expert avenue you dealt with the issue forced me to jump with fulfillment. Now i am thankful for your information and in addition wish you find out what a powerful job that you are getting into educating other individuals through your web site. Most probably you have never encountered all of us.
Reply balenciaga
10:45 PM on July 16, 2020 
I precisely wanted to thank you very much once again. I am not sure the things I might have worked on in the absence of the entire secrets discussed by you regarding this situation. It actually was a very distressing crisis in my opinion, nevertheless noticing this specialized fashion you solved it took me to leap with fulfillment. Now i'm happier for this information as well as hope that you are aware of an amazing job you were accomplishing teaching people today via your site. I'm certain you have never met all of us.
Reply nike air max 270
10:18 PM on July 17, 2020 
I simply wanted to type a message to express gratitude to you for all the fantastic instructions you are sharing on this website. My long internet lookup has now been honored with beneficial insight to exchange with my pals. I would mention that most of us readers actually are unquestionably endowed to live in a perfect network with so many perfect people with very helpful points. I feel very privileged to have discovered your entire web pages and look forward to really more awesome minutes reading here. Thanks again for everything.
nike air max 270
Reply stephen curry shoes
7:27 PM on July 20, 2020 
Thank you for all your work on this website. Kim takes pleasure in carrying out internet research and it's really easy to see why. All of us learn all relating to the lively method you render vital strategies via the website and therefore foster participation from some other people on this content then our daughter is certainly becoming educated so much. Have fun with the remaining portion of the year. You are always carrying out a brilliant job.
stephen curry shoes
Reply cheap jordans
4:53 PM on July 21, 2020 
I as well as my pals were examining the nice procedures found on your web blog then all of the sudden got a horrible feeling I had not thanked the site owner for those tips. All of the women were definitely certainly joyful to read them and have in effect in reality been enjoying them. Appreciate your really being very accommodating and for figuring out varieties of excellent subject matter most people are really needing to understand about. Our own sincere apologies for not expressing gratitude to earlier.
cheap jordans
Reply kd 12
9:53 PM on July 23, 2020 
I enjoy you because of all your hard work on this web site. My mum takes pleasure in setting aside time for research and it is obvious why. I hear all about the powerful method you give functional information through this blog and even attract contribution from people on this area of interest so our child is truly being taught a lot. Enjoy the rest of the year. You have been performing a fantastic job.
kd 12
Reply paul george shoes
6:14 PM on July 24, 2020 
I precisely wished to appreciate you once again. I do not know what I would have sorted out without those advice discussed by you regarding such a industry. It was a depressing crisis in my position, nevertheless coming across this expert form you managed it made me to leap with joy. I'm just happy for your assistance and even sincerely hope you realize what a powerful job you're putting in educating most people with the aid of your web blog. More than likely you haven't encountered all of us.
paul george shoes
Reply christian louboutin outlet
3:59 AM on July 27, 2020 
I intended to create you the little bit of remark just to give many thanks again for all the remarkable methods you have documented on this page. It was certainly wonderfully generous of people like you to supply publicly exactly what a few people could possibly have offered for sale as an e book to help make some profit for their own end, chiefly now that you could have tried it in the event you considered necessary. Those ideas in addition served like the easy way to be aware that other individuals have the same keenness much like mine to understand significantly more when it comes to this problem. I believe there are millions of more enjoyable situations up front for many who see your site.
christian louboutin outlet
Reply kd 10
6:58 PM on July 27, 2020 
I wish to show my appreciation to this writer for bailing me out of this particular problem. Because of looking throughout the online world and meeting tricks which are not pleasant, I was thinking my entire life was done. Being alive minus the solutions to the difficulties you have resolved as a result of the blog post is a critical case, and ones which may have in a negative way affected my career if I had not discovered the blog. The competence and kindness in taking care of every aspect was priceless. I am not sure what I would have done if I hadn't encountered such a point like this. I'm able to at this moment look ahead to my future. Thanks so much for your impressive and results-oriented guide. I will not be reluctant to refer your blog post to any person who would need recommendations about this problem.
kd 10
Reply bape hoodie
8:30 PM on July 29, 2020 
I actually wanted to construct a brief word to say thanks to you for some of the fabulous ideas you are writing here. My rather long internet research has finally been compensated with awesome facts and techniques to write about with my family members. I 'd express that most of us website visitors actually are very much fortunate to exist in a fabulous community with so many special professionals with beneficial opinions. I feel very privileged to have seen the website page and look forward to tons of more brilliant minutes reading here. Thanks once again for everything.
bape hoodie
Reply stephen curry shoes
4:34 PM on July 30, 2020 
I am just writing to make you understand of the cool experience our princess experienced reading through the blog. She discovered a good number of things, with the inclusion of how it is like to have an incredible teaching mood to let many people without problems comprehend selected hard to do subject matter. You really surpassed my expectations. Thank you for showing such warm and helpful, safe, educational and in addition fun tips about this topic to Lizeth.
stephen curry shoes
Reply off white
7:51 PM on August 1, 2020 
Needed to write you that very little observation to be able to thank you over again with the unique opinions you have featured on this website. It is quite extremely open-handed of you to provide easily exactly what most of us would have advertised as an e book in making some profit on their own, specifically now that you could have tried it in case you desired. The advice as well worked to provide a easy way to comprehend the rest have the same interest just as mine to know the truth a lot more when it comes to this condition. I think there are some more pleasant situations in the future for individuals who looked over your blog.
off white
Reply lebron 17
5:13 PM on August 2, 2020 
Thank you a lot for giving everyone an extremely superb possiblity to read in detail from this web site. It can be so lovely and as well , jam-packed with a great time for me and my office colleagues to visit your blog not less than 3 times in one week to read the latest items you have. Not to mention, I am usually motivated with your powerful tactics you give. Some two facts in this posting are unquestionably the most effective we have all ever had.
lebron 17
Reply supreme hoodie
8:02 PM on August 4, 2020 
I precisely wanted to thank you very much all over again. I'm not certain the things that I might have created without the entire information documented by you relating to my concern. Previously it was a very hard issue for me, but considering a expert way you treated that forced me to jump for fulfillment. I am just grateful for your assistance and believe you realize what a powerful job you're doing teaching men and women through the use of your blog post. Most probably you have never met any of us.
supreme hoodie
Reply longchamp
4:16 PM on August 5, 2020 
Thanks a lot for giving everyone an exceptionally nice chance to read articles and blog posts from this site. It's always so brilliant and also stuffed with a great time for me personally and my office mates to search your blog at the very least 3 times in one week to read through the fresh tips you have got. And indeed, I am just usually motivated with the great suggestions you serve. Some two tips in this post are without a doubt the most suitable we have ever had.
Reply curry 7
5:07 PM on August 7, 2020 
I wanted to draft you this little remark to finally say thanks a lot once again with the stunning solutions you've shown in this article. It is so open-handed with you to present without restraint all that a lot of folks might have offered for sale for an ebook to help make some bucks for themselves, certainly considering the fact that you might have tried it in case you desired. Those basics additionally acted like the easy way to fully grasp that some people have the same dreams similar to my personal own to know much more when it comes to this matter. I'm sure there are thousands of more fun times ahead for individuals that look into your website.
curry 7