PERNICIOUSIRS

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:

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 anextension, taxpayers
are required to pay their full
tax bill before the filing
deadline.

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.

Trust Fund Recovery Penalty

TheTrust Fund Recovery
Penalty(TFRP) is charged if
the person (sole proprietor,
partner, corporation, or an
employee of any kind of
business) responsible
forwithholding and
depositing taxesto the IRS
fails to do so. This
individual is personally
held responsible for paying
the entire amount of
unpaid trust fund tax, plus
interest.

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
suffi cient economic substance
(a transaction that lacks
meaning or purpose), the IRS
can charge this penalty.

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.

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.

To Learn More
Visit
www.taxassistancegroup.org
or Call
(855)549-7829