The Center For Debt Management
Debt Relief

Debt Consultation

Debt Settlement

Debt Consolidation

Debt Management

Credit Counseling

Filing Bankruptcy

Budget Software

Tax Debt Relief

Student Debt

Business Debt

Stop Foreclosure

Credit Report

Legal Resources

Credit and Financing

Financial Resources

Income Resources

US Tax Center

Insurance Center

Financial Library

Financial Bookstore


When Do IRS Penalties
and Interest Apply?

Penalties and interest do not apply in years in which a taxpayer is entitled to a refund. About a third of those who file returns for past years discover they have a refund coming.

Penalties and interest apply to years in which money is owed. The interest charged on late payments changes quarterly. During the last several years the interest rate has ranged from a high of 9 % to a low of 4 percent.

Filing Late Penalty

The penalty for filing late is generally 5 percent per month, or part of a month, up to 25 % of the amount of the tax shown due on the return.

Paying Late Penalty

The penalty for paying late is 0.5 % per month, up to 25 % of the unpaid amount due.

Waiver of Penalties

The IRS recognizes many people drop out of the system because of personal problems, including serious illness, a death in the family, or loss of financial records in a natural disaster. Depending on the situation, informing the IRS why returns have not been filed could result in a waiver of penalties.

Important Facts:

  • Taxes paid in a timely manner reduces the amount
    of penalties and interest a taxpayer may owe.

  • Interest is calculated on the unpaid balance, penalties,
    and interest that have been charged to the tax account.

  • While making payments on a tax debt through an installment agreement, penalties and interest continue on the unpaid portion of that debt.

  • The interest rate on a bank loan or cash advances on a credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code.

Over 2,000 Pages of Content
Center For Debt Management

Center For Debt Management

The Center For Debt Management

Helping Consumers Save Money and Reduce Debt Is Our Only Business!

We invite you to explore the sectors listed below. We promise that you'll find exceptional values, offers and resources to reduce your living expenses and to enjoy life! But First—if you're over-your-head in debt—get a free no-obligation debt consultation right now!

Debt Management and Financial Services! The Internet's oldest and most comprehensive debt management agency! Resources for debt management, consumer credit counseling, debt consolidation loans, debt settlements, legal aid, financial aid, credit and financing, credit reports, budget software, insurance, income resources, tax assistance and more. Get out of Debt! Call Now — 1800DEBT.COM

Established In 1989 and Serving The Online Community Since 1992!

Get Out Of Debt: Call

Center For Debt Management