Types Of IRS Tax Penalties

Every year, the IRS sends letters to thousands of taxpayers and asks them to pay for their tax penalties. What kind of tax penalties is the IRS requesting? There are many different types of tax penalties. The types of penalties that the IRS assesses vary from person to person, and tax case to tax case. Most of the time, taxpayers receive penalties for making a mistake on their taxes, whether by accident or on purpose. However, a simple mistake can lead to a costly tax penalty. Prevent costly tax penalties from adding up on your existing debt by avoiding the following tax penalties.

For tax penalty charges on your tax debt that you want to see about removing, contact a tax relief specialist. The professionals at Platinum Tax Defenders have successfully helped clients reduce various penalties from their tax debt.

Failure to File

Taxpayers who do not file their tax returns on time, or at all, will receive a Failure to File tax penalty. Failing to submit your tax return by the deadline for that tax year will result in a tax penalty charge. The IRS will add the tax penalty charge to what you might already owe to the IRS. If you are expecting a tax refund from the IRS, the IRS will deduct the tax penalty from your refund. For taxpayers who are unable to submit their tax returns by the deadline, they can request a tax filing extension. A tax filing extension provides you with another six months to prepare and file your tax returns. However, the extension does not allow you to avoid paying taxes that you owe by the deadline.

Late Tax Payment

A Late Tax Payment occurs when taxpayers fail to pay their tax balance by midnight on the tax filing deadline. The IRS will add penalties for paying taxes late to the taxpayer’s existing debt. Also, your tax balance accrues interest daily for every month that you fail to pay your taxes. Tax penalty fees combined with interest can significantly increase your tax burden.

Underpayment Penalty For Estimated Taxes

An Underpayment Penalty for estimated taxes is a fine against taxpayers who do not pay the full amount of their taxes. For those who underpay what they owe, they may incur this tax penalty. The IRS will add the tax penalty to your existing tax debt, and it could make paying your next taxes more challenging. If you aren’t sure how much you owe in taxes, contact a tax resolution professional. It’s better to overpay than to fall short of the full amount you owe.


Committing fraud is one of the most serious offenses you can make as a taxpayer. Fraud involves not being honest on your tax returns to lower your tax burden. Examples of fraud commitment include not reporting a source of income or claiming exaggerated deductions. If the IRS catches you committing fraud, you could face a tax penalty of 75 percent of your tax debt. Also, committing fraud can get you legal penalties such as jail time. If the IRS is accusing you of tax fraud, you should consult a tax attorney immediately. You can avoid tax fraud by ensuring you’re disclosing all income sources and proof of your deductions on your taxes. Remember, the IRs receives the same evidence of your income as you do each year. If you lie, the IRS will find out.

Charitable Organization Penalty

Owners and operators of charitable organizations will face sizable tax penalties if they engage in for-profit activities. Also, if caught, the organization can face losing its non-profit, tax-exempt status. Nonprofits can avoid this tax penalty by avoiding engaging in activities that the IRS would consider to be for-profit.

Failure to Provide a Social Security Number

When taxpayers file their tax returns, they must provide Social Security numbers for themselves and their family members. If they don’t provide social security numbers, they can face a tax penalty of $50 for each omission. You cannot avoid giving out this information when filing your income taxes.

Bad Check Penalty

If you make a check out to the IRS and it bounces, you’ll incur a tax penalty. The IRS penalizes you $15 or the full amount of a check for $750 and under, whichever amount is less. If your check is for more than $750, you will incur a tax fine of two percent of the check’s total.

Failure to Pay Tax Penalty

You have 21 days to pay your tax debt. If you don’t pay, the IRS will charge you one-half percent of the tax total for each month you’re late. The tax penalty cannot exceed 25 percent in one year. If you can’t pay your taxes, rather than incur late fees, consult a tax resolution professional. A reputable tax relief firm can help you identify which type of tax relief is right for you. The professionals at Platinum Tax Defenders can help you navigate your tax debt situation. A tax resolution professional can also help you apply for Penalty Abatement.

What Is Penalty Abatement?

The IRS’ Penalty Abatement allows first-time noncompliant taxpayers to request removal of specific tax penalties for a single period. Taxpayers can request a first-time Penalty Abatement for failure-to-file and failure-to-pay tax penalties. Business taxpayers can claim a Penalty Abatement for tax penalties for failure to deposit payroll taxes. A tax resolution professional can help you apply for and successfully acquire a Penalty Abatement. Contact Platinum Tax Defenders today for help with removing your tax penalties.

Get Help With Tax Penalties From Tax Resolution Experts

If you’re facing tax penalty charges, call Platinum Tax Defenders today. Platinum Tax Defenders have years of experience helping our clients with tax resolution options to reduce tax penalties. The expert tax relief team includes tax attorneys and x-IRS attorneys who are familiar with tax law and the IRS. Before you go into a tax audit with the IRS, make sure you consult a tax attorney. Tax relief experts can provide you with the help you need to survive your tax audit successfully.

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