There are many different things that the IRS can penalize you for: underpayment, late payments, non-payment, and returns improperly filled out are just a few of the more common things the IRS penalizes. These penalties can add up very quickly and cause you some serious financial hardship.
If you incorrectly fill out your tax returns or you fill it out incompletely you can be fined by the IRS up to $500. Even though this is often an accidental thing they might see it as you delaying or interfering with their efforts to collect taxes from you.
If you end up owing the IRS money when you file your return you can get a penalty of .5% of your unpaid taxes each month the taxes are not paid. This penalty can only go to a maximum of 25% of the taxes owed, but that could still be a substantial amount of money. Even if you have set up an installment agreement and are paying the IRS monthly to pay down your owed taxes you will still be getting the penalty.
If you do not file your return by the correct day (including an extension) you may have to pay a failure-to-file penalty. This can be up to 5% of the amount of taxes due at the original filing due date. You can accrue this penalty each month that the return is late. If your return is more than 60 days late those penalties will likely jump to $100 or 100% of the taxes balance, whichever is less.
These are just a few of the penalties the IRS can levy against you for various reasons. It is important to be on time and accurate when you file your returns. However, in the event that you are hit with tax penalties, 911 Tax Relief can help get them reduced or removed from your account.