IRS Late Penalty Guide – Robert Loe & Associates (2024)

FAQs

How do I fight the IRS late filing penalty? ›

If you disagree you must first notify the IRS supervisor, within 30 days, by completing Form 12009, Request for an Informal Conference and Appeals Review. If you are unable to resolve the issue with the supervisor, you may request that your case be forwarded to the Appeals Office.

The IRS will automatically waive failure-to-pay penalties on unpaid taxes less than $100,000 for tax years 2020 or 2021. You're eligible for this relief if you meet all the following criteria: Filed a Form 1040 or 1041 tax return for years 2020 and/or 2021. Were assessed taxes of less than $100,000.

The failure-to-pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25%, of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full.

Tax penalties may be negotiated, reduced, or even totally eliminated in some cases. There are a number of IRS programs that can be used when you have significant tax penalties and want some kind of relief.

Penalty Relief by Administrative Waiver

An administrative waiver provides relief from specific penalties under certain conditions. First Time Abate is the most common administrative waiver for individuals and businesses. Other administrative waivers can be addressed in issued IRS: Policy Statements.

One-time forgiveness, otherwise known as penalty abatement, is an IRS program that waives any penalties facing taxpayers who have made an error in filing an income tax return or paying on time. This program isn't for you if you're notoriously late on filing taxes or have multiple unresolved penalties.

Appealing against a late filing penalty

Initially you make your appeal to HMRC. The appeal should normally be made within 30 days of the penalty notice being issued, but HMRC may consider late appeals. If HMRC does not allow your late appeal, you can apply to the Tax Tribunal to have your appeal allowed.

Use Form 843 to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax.

The penalty for late payment is 1/2% (1/4% for months covered by an installment agreement) of the tax due for each month or part of a month your payment is late. The penalty increases to 1% per month if we send a notice of intent to levy, and you don't pay the tax due within 10 days from the date of the notice.

You can avoid a penalty by filing accurate returns, paying your tax by the due date, and furnishing any information returns timely. If you can't do so, you can apply for an extension of time to file or a payment plan.

How to get IRS to forgive penalties? ›

You may qualify for penalty relief if you demonstrate that you exercised ordinary care and prudence and were nevertheless unable to file your return or pay your taxes on time. Examples of valid reasons for failing to file or pay on time may include: Fires, natural disasters or civil disturbances.

The Internal Revenue Service will automatically waive failure to pay penalties on assessed taxes less than $100,000 for tax years 2020 or 2021.

You have the legal right to represent yourself before the IRS, but most taxpayers have determined that professional help, such as specialized attorneys, accountants, or tax specialists who are experienced in helping taxpayers resolve unpaid tax debts can significantly impact your odds of reaching an acceptable ...

Waived tax penalties

In late 2023, the IRS announced it would be waiving nearly $1 billion in tax penalties (but not interest) related to tax years 2020 and 2021. The waiver only applies to taxpayers who owe less than $100,000 in taxes for each of those years and received an initial balance due notice prior to Dec.

Appealing against a late filing penalty

Initially you make your appeal to HMRC. The appeal should normally be made within 30 days of the penalty notice being issued, but HMRC may consider late appeals. If HMRC does not allow your late appeal, you can apply to the Tax Tribunal to have your appeal allowed.

If you do not agree that a penalty is due, you can appeal against it to HMRC. You should consider paying the penalty if you appeal. If you do not, and your appeal is rejected, you'll have to pay interest on the penalty from the date it was due to the date you paid it.