Penalties

IRS Penalties & Interest

Tax balances can include the underlying tax, one or more penalties and interest. Before assuming every dollar can be removed, separate the parts of the balance and understand why each one was assessed.

Penalty relief is fact-specific

Certain penalties may qualify for administrative or reasonable-cause relief depending on current IRS rules and the taxpayer’s compliance history and circumstances. Interest is generally governed by different rules.

Documentation can matter

If relief is based on circumstances such as serious illness, disaster or inability to obtain records, keep evidence showing what happened and how it affected compliance.