IRS penalty revisions for 2024
  • May 7, 2024
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Tax season is approaching, and with it comes the ever-present concern about deadlines and penalties. While navigating the complexities of tax filing can feel daunting, staying informed about updates can help you stay on top of your obligations, seek timely IRS debt relief, and avoid unnecessary stress. This blog post delves into the key changes in IRS penalty amounts for 2024, empowering you to make informed decisions regarding your tax situation.

Overview of IRS Penalty Updates for 2024

The Internal Revenue Service (IRS) periodically adjusts penalty amounts to account for inflation and ensure fair enforcement of tax laws. For the 2024 tax year, several key changes have come into effect, impacting penalties associated with:

  1. Late filing of individual and business tax returns, including Forms 1040, 1040-NR, 1120, and others.
  2. Late payment of taxes, applying to income taxes, estimated taxes, and payroll taxes.
  3. Failure to file or pay required forms, encompassing various forms such as W-2s, 1099s, and excise tax returns.

Key Changes in IRS Penalty Amounts for 2024

Here’s a revised breakdown of the key changes in IRS penalty amounts for 2024:

  • Late Filing Penalty: The penalty for filing individual tax returns after the due date (excluding extensions) has doubled to 1 percent per month, compared to the previous rate of 0.5 percent. Consequently, the maximum penalty for late filing can now reach 5 percent for returns filed over 5 months late, up to a maximum of 25 percent.
  • Late Payment Penalty: Similarly, the penalty for paying taxes late has increased to 0.5 percent per month, up from 0.25 percent previously. This results in a maximum penalty of 5 percent for payments over 10 months late.
  • Failure to File or Pay Estimated Taxes: Penalties for failing to file or pay estimated taxes have experienced slight increments, ranging from 0.5 percent to 1 percent per month, depending on the specific penalty type.
  • Failure to File Certain Information Returns: Penalties for neglecting to file certain information returns, such as 1099 forms, have been adjusted, with some penalties increasing by as much as 20 percent.
  • Information Return Penalty: This applies to taxpayers engaged in trade or business who fail to furnish their required return or payee statement correctly by the due date. Initially, a penalty of $60 will be incurred for up to 30 days of delay, escalating to $310 after August 1st. Failure to file altogether will result in a penalty of $630.
  • Accuracy-Related Penalty: The accuracy-related penalty, imposed for underpayments due to negligence or disregard of tax rules, remains significant at 20 percent of the portion of the underpaid tax amount. This underscores the critical importance of precise tax reporting.
  • Erroneous Claim for Refund or Credit Penalty: The penalty is charged when taxpayers submit a claim for refund or credit of income tax without reasonable cause. The penalty amount for an erroneous claim is 20 percent.

Understanding the Revised IRS Penalty Amounts for 2024

While these changes might seem minor, they can accumulate quickly, adding a significant burden to tax liabilities. It’s essential to understand the implications for your specific situation. Here are some key points to remember:

  1. The penalties apply per month or quarter: Do not underestimate the impact of delayed action. The longer you wait to address late filings or unpaid taxes, the higher the penalties will accrue.
  2. Thresholds exist for some penalties: Not everyone will face increased penalties. For individual late filing penalties, a threshold applies based on the amount of tax owed. Consult the IRS website or our tax professional for details.
  3. Relief options are available: Facing overwhelming penalties? Do not despair! The IRS offers options like penalty abatement, which may reduce or eliminate your penalties under certain circumstances. Consulting our tax attorney in Fort Worth, TX, can help you explore these options and navigate the complexities of tax penalty relief.

Notable Adjustments to IRS Penalties in 2024

Beyond the mentioned changes, here are some additional points to consider:

  • Extensions: Filing for an extension remains an option to avoid late filing penalties. However, remember that extensions only grant more time to file, not to pay. Late payment penalties will still accrue on any unpaid balance after the original due date.
  • Reasonable Cause Exception: The IRS may waive or reduce penalties if you can demonstrate reasonable cause for failing to file or pay on time. Consulting with our tax attorney can help you evaluate whether you qualify for this exception and navigate the process of requesting penalty relief.
  • IRS Debt Relief Programs: For taxpayers facing significant tax debts and struggling to comply with their obligations, various IRS debt relief programs might be available. Our qualified tax attorney can guide you through these programs and assist you in finding the most suitable solution for your situation.

Last Word

Staying informed about IRS penalty updates is crucial for responsible tax management. While this blog provides a general overview, remember that every tax situation is unique. If you have questions or concerns about the revised penalty amounts for 2024, or if you’re facing potential penalty issues, contact the Law Offices of Nick Nemeth in Fort Worth, TX. Our experienced tax attorneys can provide personalized guidance and help you navigate the complexities of tax law with confidence. To discuss your requirements or learn more about IRS penalty abatement options in Fort Worth, TX, call (817) 623-5399. Alternatively, you can fill out our contact form.

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Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
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Carla AtwalCarla Atwal
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Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
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Lucy FoyLucy Foy
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My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
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Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
R GR G
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
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I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
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Eddie WaltEddie Walt
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During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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