IRS penalties are penalties that are imposed for one of two reasons. The first is for failing to file your tax returns on time, which means by the deadline given by the IRS. However, you may be able to avoid the penalty if you have a valid reason for late filing that you have already discussed and agreed with the IRS or if you have a tax accountant who is able to sort this out on your behalf. The second reason why an IRS penalty may be applied is if you fail to pay your tax bill on time even if you filed your return on time. Again, if you are struggling to pay the amount you owe you need to discuss this with the tax office or with your tax accountant so that appropriate action can be taken.
When it comes to the amount that the IRS charges in terms of penalties the amounts will vary based on whether it is for late filing or non-payment of owed taxes. When it comes to late filing, the amount that the IRS charges is 5 percent of the amount owed for each month that the return is late, including part months. This continues for up to five months. There is a minimum penalty of the lesser of $135 or 100 percent of the amount owed if you are over 60 days late with your tax return filing.
In the event of failure to pay the tax you owe, the IRS charges a late payment penalty of 0.5 percent for each month or part month the payment is late, which goes up to a maximum of 25 percent. If the IRS issues a notice of intent to levy but the amount remains unpaid ten days after this, the 0.5 percent increases to 1 percent.