What are IRS Penalties?

The Internal Revenue Code imposes many different kinds of penalties as a result of late filing, late payment of taxes, and inaccurate, erroneous, or fraudulent tax tax returns. The most common penalties are for filing late or paying taxes late.

Typically, penalties are imposes in the form of fines, and relative to the amount of tax liability you owe. For example, failure to file you your tax return on time usually results in a penalty equal to 5% per month of your tax debt owed, penalized for as many months as you are late filing that tax return.

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Why did I get IRS Penalties?

If you do not file your return and pay your tax by the due date, you may have to pay a penalty. You may also have to pay a penalty if you substantially understate your tax, file an erroneous claim for refund, or file a frivolous tax submission. In general, if you did not satisfy your legal obligation to file your taxes accurately and pay on time, you will be penalized.

When penalties are assessed, the IRS will notify you, reference the applicable tax code you violated, and show how the penalty was calculated.

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What Should I do if I have Penalties?

USTR recommends that businesses and individuals facing IRS penalties consult a qualified tax professional. Many tax professionals provide a free consultation, which can ensure that you are treated fairly by the IRS.

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How do I Know if I Should Contact a Tax Professional?

USTR believes that contacting a tax resolution professional is common sense. When you have a medical problem, you contact a doctor. When you have a car problem, you contact a mechanic. When you have a tax problem, you should contact a tax professional. Many tax professionals provide a FREE consultation and USTR can connect you with some of the best tax professionals in the country.

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