- IRS penalties
IRS penalties, as set out in the
Internal Revenue Code, are imposed to "enhance voluntary compliance." [Internal Revenue Service, "Internal Revenue Manual", Policy P-118, IRM 184.108.40.206.3.] There are over one hundred-forty separate IRS penalty provisions. [Internal Revenue Service, "Internal Revenue Manual", IRM 220.127.116.11.1.] Common IRS civil law penalties include the penalty for filing a fraudulent return, the accuracy related penalties, the penalty for failure to timely file a return, the penalty for failure to timely pay a tax, and the frivolous return penalties.
The fraudulent return penalty is set out in IRC Section 6663. [See usc|26|6663.] This penalty is "75% of the portion of the underpayment [of tax] which is attributable to fraud." The fraudulent failure to file return penalty is set out in IRC Section 6651(f). This penalty also has a maximum 75% rate.
The accuracy-related penalty is set out in IRC Section 6662. [See usc|26|6662.] This penalty is 20% of the amount of the portion of the understatement of tax attributable to the conduct being penalized. Accuracy penalties include the "negligence or disregard of rules or regulations" penalty, the "substantial understatement of income tax" penalty, the penalty for "substantial valuation misstatement," the penalty for "substantial overstatement of pension liabilities," and the penalty for substantial valuation misstatement in connection with gift tax or estate tax.
The penalty for failure to timely file a return is set out in IRC Section 6651(a). [See usc|26|6651.] This penalty is equal to 5% of the amount required to be shown on the return, per month up to a max of 25% of the amount required to be shown on the return. If the return is filed more than 60 days after the due date, the minimum penalty is the lesser of $100 or 100% of the tax required to be shown on the return.
The penalty for failure to timely pay a tax is set out in IRC Section 6651(a)(2) & (3). [See usc|26|6651.] This penalty is equal to 0.5% per month, up to 25% of the amount shown as due on a return.
The penalty for failure to timely pay estimated is set out in IRC Section 6654 & 6655. [See usc|26|6654 and usc|26|6655.] The penalty is based on the general underpayment interest rate under IRC Section 6621 calculated on the installment amount based on the "required annual payment" from the date that the estimated installment is due to the earlier of the date the tax is paid or the original due date of the return.
The frivolous return penalty is set out in IRC Section 6702. [See usc|26|6702.] This penalty imposes a $500 fine for filing a frivolous income tax return. The penalty applies to an individual who files a return of tax on behalf of a tax shelter. [See usc|26|6671(b).]
Wikimedia Foundation. 2010.
Look at other dictionaries:
IRS Publication 971: Innocent Spouse Relief — A document published by the Internal Revenue Service (IRS) that outlines the three types of tax liability relief for spouses or former spouses who filed joint income tax returns. Couples filing a joint tax return are both liable for the tax… … Investment dictionary
IRS Publication 470: Limited Practice Without Enrollment — A document published by the Internal Revenue Service that outlines acceptable conduct for unenrolled tax professionals that represent taxpayers. IRS Publication 470 defines the circumstances in which an unenrolled professional is allowed to… … Investment dictionary
IRS Publication 590: Individual Retirement Arrangements (IRAs) — A document published by the Internal Revenue Service (IRS) that provides information on individual retirement arrangements (IRAs), including how to set up an IRA, how to contribute, how much can be contributed, how to treat distributions and how… … Investment dictionary
Taxation in the United States — is a complex system which may involve payment to at least four different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and… … Wikipedia
Balance Consulting — Infobox Company company name = company type = Private foundation = 1989 location = Ann Arbor, Michigan key people = Janet Fry, President; Denise Johnson, General Counsel Tax Compliance Manager num employees = 37 industry = Professional services… … Wikipedia
Revenue Ruling — Revenue Rulings are public administrative rulings by the Internal Revenue Service (IRS) that apply the law to particular factual situations. A revenue ruling can be relied upon by all taxpayers. A taxpayer may, for a fee, seek advice from the IRS … Wikipedia
Tax protester statutory arguments — Part of the Taxation in the United States series Tax protest in the United States … Wikipedia
Tax protester (United States) — Part of a series on Taxation Taxation in the United States … Wikipedia
Intermediate sanctions — is a term used in regulations enacted by the United States Internal Revenue Service that is applied to non profit organizations who engage in transactions that inure to the benefit of a disqualified person within the organization. These… … Wikipedia
USA PATRIOT Act, Title III, Subtitle B — The USA PATRIOT Act was passed by the United States Congress in 2001 as a response to the September 11, 2001 attacks. It has ten titles, with the third title ( Title III: International Money Laundering Abatement and Financial Anti Terrorism Act… … Wikipedia