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Pernicious IRS Penalties

The IRS charges a variety of penalties for different kinds of non-compliances. They typically will charge either a civil penalty or criminal penalty, depending upon the infraction. Here are some common penalties the IRS charges.

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Pernicious IRS Penalties

  1. 1. The IRS charges a variety of penalties for different kinds of non- compliances. They typically will charge either a civil penalty or criminal penalty, depending upon the infraction. Here are some common penalties the IRS charges: PERNICIOUS IRS PENALTIES
  2. 2. Penalty for Failure to Pay Taxes Usually, the penalty charged for non- payment of taxes is 0.5% of the taxes due. However, it can grow to a maximum of 25% in some cases. If a taxpayer owes taxes and does not pay them by the filing deadline, the IRS begins to charge penalties and interest on the taxes owed for each month, or part of the month the return remains unfiled. Even with an extension, taxpayers are required to pay their full tax bill before the filing deadline.
  3. 3. Penalty for Failure to File Tax Return The IRS charges a penalty of 5% of the tax debt owed for non-filing of a tax return. A taxpayer is charged this penalty if he or she is required to file a return and does not do so before the filing deadline. This penalty maxes out at 25% and is charged each month or part of a month the tax return remains unfiled.
  4. 4. Trust Fund Recovery Penalty The Trust Fund Recovery Penalty (TFRP) is charged if the person (sole proprietor, partner, corporation, or an employee of any kind of business) responsible for withholding and depositing taxes to the IRS fails to do so. This individual is personally held responsible for paying the entire amount of unpaid trust fund tax, plus interest.
  5. 5. Penalty for Underpayment of Taxes The IRS may charge a penalty if there is understatement of income due to negligence or willful disobeying of the tax rules, substantial underpayment of taxes, or hiding of assets and/or income overseas. Also, if benefits are claimed without sufficient economic substance (a transaction that lacks meaning or purpose), the IRS can charge this penalty.
  6. 6. Additional Penalty for Early Retirement Accounts Withdrawal If you make an early withdrawal from your retirement account, a tax penalty of 10% is charged along with the regular income tax. If you qualify for an exception, you may be able to avoid the penalty or have it removed.
  7. 7. Penalty for Tax Fraud Penalty for tax fraud is punishable by both fine and jail time. It may include a fine of not more than $250,000 for individuals ($500,000 for corporation) and/or imprisonment of not more than 3 years. Tax fraud includes providing false statements and information to the IRS in any form.
  8. 8. To Learn More Visit www.taxassistancegroup.org or Call (855) 549-7829

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