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Many people don’t realize that the IRS charges a penalty of up to 25% just for filing your tax return late. That’s right; you will get hit with an additional 25% of what you owe if you miss the deadline for filing individual tax returns. It’s even worse for payroll tax returns.

You can file any tax return on time and avoid the 25% penalty and interests that would be charged on top of that even if you don’t send in the money that is owed on the return.

Below are the types of penalties the IRS sends notices and letters about:

• Information Return Penalty: For taxpayers who fail to file or provide correct information returns or payee statements by the due date.
• Failure to File Penalty: When a tax return is not filed by the due date.
  Failure to Pay Penalty: For not paying the taxes owed by the due date.
• Accuracy-Related Penalty: When a taxpayer claims deductions or credits they are not eligible for or fails to report all their income.
• Erroneous Claim for Refund or Credit Penalty: If a claim for an excessive amount of income tax refund or credit is submitted without reasonable cause.
• Failure to Deposit Penalty: For inaccurately or late payment of employment taxes.
• Tax Preparer Penalties: For misconduct by tax return preparers.
  Dishonored Checks Penalty: When payment by check or other form is not honored by the bank.
• Underpayment of Estimated Tax by Corporations and Individuals: For not accurately or timely paying estimated tax.
• International Information Reporting Penalty: For certain taxpayers who fail to report foreign sourced financial activity accurately or timely.

Interests get charged on what you owe and on any penalties that are unpaid. Interests continue to accrue until the payment is made