The IRS has several categories under which people can be fined. It ranges from late payment to under or overpayment. These penalties can be avoided and should be avoided to cancel out chances of financial loss. Here are the IRS penalties that you want to avoid.
IRS Penalties That You Want to Avoid
Filing Taxes After the Due Date:
If the person or the company files for taxes late, they are charged a penalty. It is important to file taxes as soon as possible. Delay is seen as a violation of ethics and is punishable by the IRS. It is possible for the delay to be up to 20-25 days, since the IRS sees it as a result of circumstances. However, if the delay crosses 60 days or so, the act becomes punishable. It is also important for the person to file taxes and state the value of their business correctly. If the IRS finds out that the value is understated to avoid income taxes, it is again punishable. The value should be stated properly, and with precision. Know about how to correct errors on taxes.
Not Paying Taxes:
Not paying taxes which are due is again a punishable offense. Not paying taxes or refusing to pay taxes will be charged heavily. You must pay all taxes on time. Not paying taxes is again a violation of ethics and rules. It is a highly punishable offense, and is viewed as a scam.
Fraud:
If the person or the business is caught committing fraud, they will be penalized. It is also important that the business runs clean and without scams. The IRS views scams as a grave offense. The involvement of a person or a business in a scam is a rule the IRS is very particular about. Moreover, people must take responsibility for everything they market. If anything is found to be a part of a larger scheme, it will be penalized. The consequences can be worse.
Bounced Check:
The IRS does not take a bounced check lightly. Once or twice it is seen as an accident. However, if the IRS keeps receiving checks that bounce, you will be penalized. They view it as the person dodging paying taxes and writing checks that bounce. The check given to the IRS should not bounce. It will be considered as a late payment or no payment. The bounced check can earn a penalty the first time. This chance shouldn’t be taken.
Disregarding Rules and Regulations:
Any rules or regulations that aren’t followed qualify for penalization. Moreover, rules and regulations should be followed religiously and shouldn’t be tampered with. Their disregard can cause serious heavy penalties. The IRS is very strict about their rules and they apply to everyone. Also, trying to get out of them, or finding a way around them can be penalized. It is important, therefore, to follow the rules.
These are the various penalties that can be charged by the IRS.
