The IRS penalizes millions of taxpayers each year. The most common penalties are-Failure to File and Failure to Pay penalties. Both of these penalties can substantially increase the amount you owe the IRS in a very short period of time. To make matters worse, the IRS charges you interest on penalties.
Taxpayers often find out about IRS problems years after they have occurred. This causes the amount owed to the IRS to be substantially greater due to penalties and interest.
Some IRS penalties can be as high as 75-100% of the original taxes owed. Often taxpayers can afford to pay the taxes owed. However, the extra penalties make it impossible to pay off the entire balance.
The original goal of the IRS imposing penalties was to keep taxpayers in line by punishing them. Unfortunately, penalties have turned into additional sources of income for the IRS.
The IRS does abate penalties, so before you pay the IRS any penalty amounts, you may want to consider requesting the IRS to abate your penalties.