IRS question/assistance sought

3,637 Views | 36 Replies | Last: 3 yr ago by TxTarpon
combat wombat™
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AG
It seems to me that there is something wrong with the notice.

The IRS will charge a penalty for failing to pay the $10 on time. They will also charge interest on both the outstanding tax and the penalty.

BY my calculation the failure to pay penalty should be no more than $2.50; if the IRS rounds up, then $3.00.

From the instructions to 2018 Form 1040 on the IRS's website:

Quote:

Interest
We will charge you interest on taxes not paid by their due date, even if an extension of time to file is granted. We also will charge you interest on penalties imposed for failure to file, negligence, fraud, substantial or gross valuation misstatements, substantial understatements of tax, and reportable transaction understatements. Interest is charged on the penalty from the due date of the return (including extensions).
Quote:

Late payment of tax
If you pay your taxes late, the penalty is usually 1/2 of 1% of the unpaid amount for each month or part of a month the tax isn't paid. The penalty can be as much as 25% of the unpaid amount. It applies to any unpaid tax on the return. This penalty is in addition to interest charges on late payments.

From the IRS website"

Quote:

How We Calculate Interest Rates
We use the federal short-term rate based on daily compounding interest to calculate the interest we charge and pay. Changes to the rate don't affect the interest rate charged for prior quarters or years.
The interest rates we charge and pay on overpayments and underpayments are compounded daily. This means the interest is assessed on the previous day's balance plus the interest. For details, see interest.


You can look up the interest rate by category at this site: Quarterly Interest Rates | Internal Revenue Service (irs.gov)
TxTarpon
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You can call them.
Try first thing in the morning.
All of the IRS correspondence looks the same.
Same font that most of us dread seeing.
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