The Failure to Pay Penalty is applied when a taxpayer does not pay for the tax liabilities reported on the Tax Return 2023 on time. In general, the penalties to be paid are a percentage of the taxes that are not paid on time.The penalties for failing to pay the tax liabilities reported on the Tax Return 2023 on time may be dissolved or reduced. This is possible if a taxpayer proves a probable cause for why the tax liabilities were not paid on time and acts in good faith. Nonetheless, the interest on the penalties cannot be dissolved or reduced unless the penalty itself is dissolved or reduced.
According to the Internal Revenue Service, penalties are charged with interest. The date when the Internal Revenue Service (IRS) can begin charging interest is based on the type of penalty. An interest can increase the amount of tax liabilities to be paid in the Tax Return 2023. It will only cease once the balance is paid in full.
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Calculating Penalties For Not Paying Taxes On Tax Return 2023 On Time
An article on the eFile states that the calculation of the penalties depends on how long the tax liabilities reported on the Tax Return 2023 remained unpaid. The unpaid taxes is the amount shown on the tax return minus refundable tax credits, withholding taxes, and estimated tax payments.
Furthermore, the penalties for failing to pay the tax liabilities reported on Tax Return 2023 amount to 0.5% of the unpaid taxes per month. However, the penalties will not be over 25% of the unpaid taxes. In case both Failure to Pay and Failure to Pay penalties are to be paid in the same month, the Failure to File penalty will be reduced by the amount of the Failure to Pay penalty for that month.
However, if the Tax Return 2023 is filed on time and the taxpayer has an authorized payment plan, the Failure to Pay penalty will be reduced to 0.25% every month. If the unpaid tax liabilities are still not paid after 10 days of receiving a notice, the Failure to File penalty will increase to 1% per month. Full interest will be charged per month even if the tax liabilities are paid even before the month ends.
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