The IRS has outlined all of their penalties and charges in the Internal Revenue Code. These are supposed to encourage “voluntary compliance” from taxpayers. They have over one-hundred and forty different federal tax penalties that can be assessed for a wide variety of issues including; tax fraud, accuracy related penalties, late filing penalties, late payment penalties, failing to pay a tax, and filing a frivolous return.
Fraud penalties
As mentioned previously, a fraudulent return penalty is related to someone failing to report income or underpaying their income tax. These actions constitute fraud in every state and if caught, the fine is quite severe. The underpayment penalty is 75% of the under paid tax amount and the penalty also has a 75% maximum rate. This is a very serious and costly charge and if you have questions, ask your tax specialist because they know the laws and codes.
Accuracy penalties
The accuracy-related penalty is related to personal or income information being incorrect. This impedes the efforts of the IRS to process the return and this conduct will be severely penalized and enforced. If you omit a social security number or use a fake number, you are committing a serious error and it will cause the IRS to come after you with great fervor. You will end up owing for not filing a truthful statement on your income tax return.