• IRS fraud can cost you.shrinking pound image by hazel proudlove from Fotolia.com
  
  The Internal Revenue Service expects for all taxpayers to pay their full amount of tax owed on or before the April 15th deadline as well as complete a full and accurate return. Taxpayers who do not follow IRS guidelines may be assessed a variety of enforcement penalties. Fortunately, understanding the amount of the penalties, as well as why and how they are assessed, is relatively easy.
  
  

Failure to File Penalty

• Taxpayers who do not file their income tax returns on or before the April 15th deadline will be assessed a Failure to File Penalty in the amount of 5% of the unpaid tax for each month that the tax is late. Taxpayers can request to have the penalty abated (removed) if they can prove a "reasonable cause" for filing the return late. Examples of reasonable causes include but are not limited to illness, incarceration and military deployment. In order to request an abatement of penalty, complete IRS Form 843 and mail it to the IRS office that processes returns for your region. If you are not sure which office processes returns for your region, refer to IRS.gov (see Resources)
  
  

Failure to Pay Penalty

• A Failure to Pay Penalty is assessed in the amount of 5% for any tax not paid after the April 15th deadline. Again, as with the Failure to File penalty, you can request an abatement of the penalty if you can show reasonable cause.
  
  

Negligence Penalty

• An IRS negligence penalty of 5% of the unpaid tax is assessed in cases where the taxpayer did not take the necessary action to ensure that the information listed on his return was correct.
  
  

Estimated Tax Penalty

• Taxpayers whose income is not subject to withholding (such as self-employed persons or subcontractors) are required to make four quarterly estimated tax payments per year. The tax payments are due April 15th, June 15th, September 15th and January 15th. The IRS does make exceptions in assessing the penalty for taxpayers who pay at least 90% of their estimated tax or who owe less than $1,000 in estimated tax. Again, taxpayers who experienced a casualty, disaster or other extenuating circumstance may contact the IRS at (800) 829-1040 to request an abatement of the penalty or complete IRS Form 2210 and mail it to the IRS.
  
  

Fraud Penalty

• Taxpayers who make what the IRS defines as a "willful attempt" to defraud the government are guilty of tax fraud. A fraud penalty could be as high as 75% of the underpaid or unpaid tax created as a result of fraud.