IRS has many tax penalties for those who file late taxes or don’t pay them on time. The purpose of these penalties is to make sure that all pay their taxes on time.

If a person doesnt file their tax returns on time they will have to pay a penalty. By on time means even after an extension has been given. A 5 % penalty will be imposed for every month the defaulter delays in filing their tax returns. Maximum amount this penalty can go is 25 % of the amount the defaulter has to pay in the form of tax. However if the defaulter files the tax return after more than 60 days then the penalty will either 100 dollars or 100 percent of the amount of the defaulter has to pay the IRS. IRS will take the lesser amount as penalty. On the other hand if the defaulter has a good reason for not filing on time then they need not pay the penalty.

It is not enough if one files their tax returns on time. Paying the IRS the amount due to them on time is a must. The penalty for not paying ones taxes on time is 0.5 % of the amount due for every month that the taxes have not been paid in full. This penalty cant go over 25 % of the amount due to the IRS in the form of taxes. Defaulters who can give the IRS a valid reason for paying the taxes when they are due need not pay this penalty.

If the person files frivolous return then they will face a penalty of 500 dollars. If a person files a return that does not have enough information for the IRS to figure the correct amount of tax due to them or the return shows amounts of tax due that are not correct, this return is said to be frivolous. A frivolous report is possible if the defaulter takes a frivolous position. If the defaulter has either the desire to interfere or delay the implementation of income tax laws then they might file a frivolous return. Read more about turbotax 2010.