The law provides penalties for not filing returns or paying taxes as required. Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement.
Failure to file tax returns
If you do not file your tax return by the due date, you may have to pay a penalty. The
penalty is based on the tax not paid by the due date. See your tax return instructions
for more information about this penalty.
Failure to pay tax
If you do not pay your taxes by the due date, you will have to pay a penalty for each month,
or part of a month, that your taxes are not paid. For more information, see your tax return
instructions.
Failure to withhold, deposit, or pay taxes
If you do not withhold income, social security, or Medicare taxes from employees, or if
you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to
a penalty of the unpaid tax, plus interest. You may also be subject to penalties if you
deposit the taxes late. For more information, see
Publication 15.
Failure to follow information reporting requirements
The following penalties apply if you are required to file information returns. For more
information, see the General Instructions
for Forms 1099, 1098, 5498, and W-2G (pdf).
Failure to file information returns
A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information.Failure to furnish correct payee statements
A penalty applies if you do not furnish a required statement to a payee by the required date, if you do not include all required information, or if you report incorrect information.
The above penalties may be waived in the following circumstances.
Failure to supply taxpayer identification number
If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer
identification number of another person where required on a return, statement, or other
document, you may be subject to a penalty of $50 for each failure. You may also be subject
to the $50 penalty if you do not give your taxpayer identification number to another person
when it is required on a return, statement, or other document.
Information courtesy of the Internal Revenue Service.
Starting a Business and Keeping Records:
Introduction
What New Business Owners Need To Know
Forms of Business
Identification Numbers
Tax Year
Accounting Method
Business Taxes
Information Returns
Penalties
Business Expenses
Recordkeeping
How To Get More Information
