Are You Aware Of IRS Penalties?
Are you aware of IRS? Yes, you are right. IRS is a government agency of US that deals with tax law enforcement and tax collection. Penalties are imposed on individuals or organizations that do not pay, underpay or are involved in some kind of fraud with the tax department.
IRS law is set up so that all taxes are paid in accordance with the law. Various types of penalties are defined for different types of cases. Penalties are levied upon the individuals or organizations depending upon the limit or extent to which the tax was not paid. You may have to deal with failure to file penalty in which the penalty is imposed for not filing your return. Failure to pay penalty is for those who do not pay their taxes on time. Providing insufficient or incomplete information about your assets might result in penalty for frivolous return. Penalties for negligence, disregard or understatement issues are charged from the defaulters. Similarly, penalties for not giving social security number, criminal penalties and many others are also included.
Therefore, ignoring IRS penalties would not be the right thing to do. You may have to pay a certain amount of interest on the amount you owe to the government due to non-payment of your taxes or money for internal revenue service. Most of the people are unaware of the fact that it is not always the case where people owe money to the IRS. Many a times, IRS owes money to people whenever the refund amount is delayed. In such cases, IRS may also have to pay interest to the people.
You may be surprised to know but it is a fact that filing return and owing money to IRS is better than not filing your return and owing money. The main reason behind this is that by going this way you can eliminate the chances of failure to file penalty. You may also file an extension and save on the penalties that have been levied upon you otherwise.
However, a reasonable cause can help you avoid IRS penalties but the reason should be genuine. Some of the many ways in which you can save upon your IRS penalties are reasonable cause, standards, ignorance of the law, by mistake, forgetfulness, death, unavoidable absence, serious illness and many such factors.