Note:

The minimum penalty amount applies to income tax returns ONLY. It does not apply to employment tax, excise tax, gift tax, estate tax or penalties assessed under IRC 6698/6699 in relation to Forms 1065, 1066 and 1120-S.

706, 706-NA, 709, 709-NA, 720, 730, 940, 941, 943, 944, 945, 990-PF, 990-T, 1041, 1042, 1065-B, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, 2290

Failure to Pay (FTP) Tax Shown on the Return IRC 6651(a)(2)

Assessment Codes Manual- TC 270 Systemic- TC 276 Abatement Codes Manual- TC 271 Systemic- TC 277

In general, the penalty is 1/2% of the tax shown on the return that is not paid by the return due date with regard to extensions. The penalty is charged on the unpaid tax for each month or part of a month that the tax remains unpaid, but it cannot exceed 25% in the aggregate. See IRM 20.1.2.3.8.4, Failure to Pay Tax Shown on the Return—IRC 6651(a)(2), for more information.

706, 706-NA, 709, 709-NA, 720, 730, 940, 941, 943, 944,945, 990-PF, 990-T, 1041, 1042, 1065-B, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, 2290

Failure to File IRC 6698

Assessment Codes Manual- TC 240 Systemic- TC 246 Abatement Codes Manual- TC 241 Systemic- TC 247

For taxable years beginning after December 31, 1978, IRC 6698 imposes a penalty on a partnership that fails to file a timely or complete return. Prior to January 1, 2022 this penalty was assessed using TC 160/166. After December 31, 2021, these penalties will be assessed with a PRN and IRN: Failure to File Partnership Return Using Electronic Media

PRN 688 is used

PRN 722 is used

IRN 851 lists number of partners

IRN 852 lists number of months late

PRN 723 is used

IRN 851 lists number of partners

IRN 852 lists number of months late

IRN 853 lists the missing schedule code

1065, 1066

Failure to File IRC 6699

Assessment Codes Manual- TC 240 Systemic- TC 246 Abatement Codes Manual- TC 241 Systemic- TC 247

For S corporation returns due after December 20, 2007, IRC 6699 imposes a penalty on an S corporation that fails to file a timely or complete return as required by IRC 6037. Prior to January 1, 2022 this penalty was assessed using TC 160/166. After December 31, 2021, these penalties will be assessed with a PRN and IRN: Failure to File

PRN 722 is used

IRN 851 lists number of shareholders

IRN 852 lists number of months late

PRN 723 is used

IRN 851 lists number of shareholders

IRN 852 lists number of months late

IRN 853 lists the missing schedule codes

1120-S

Failure to Pay Estimated Tax (ES) IRC 6654 & IRC 6655

Assessment Codes Manual- TC 170 Systemic- TC 176 Abatement Codes Manual- TC 171 Systemic- TC 177

Estates and Trusts must pay estimated tax by its due date if the estate or trust is expected to owe at least $1,000 after subtracting its withholding credits. A penalty is applied if the estate or trust did not pay enough estimated tax, or it did not make the payments on time, or in the required amount. Corporations must make quarterly estimated tax installment payments if it expects its estimated tax to be $500 or more. The Corporation is subject to an underpayment penalty for failing to pay the required installment of estimated tax by its due date. Exempt organizations and private foundations are subject to an underpayment penalty for failing to pay the required installment of estimated tax by its due date. Partnerships that are required to withhold income tax on effectively connected income from their foreign partners use Form 8804 to compute their estimated tax penalty.

1041, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, Schedule A(8804), 8805, 990, 990-T, 990-PF

Failure to Deposit Taxes (FTD) IRC 6656

Assessment Codes Manual- TC 180 Systemic- TC 186 Abatement Codes Manual- TC 181 Systemic- TC 187

For deposits required after December 31, 1989, there is a four-tiered penalty. The penalty is 2% for deposits 1-5 days late, 5% for deposits 6-15 days late, 10% for all direct payments and those deposits more than 15 days late, but paid on or before the 10th day following notice and demand, and 15% (actually, a 5% addition to the 10%) for late undeposited taxes still unpaid after the 10th day following the first balance due notice or the day on which notice and demand for immediate payment is given. See IRM 20.1.4, Failure to Deposit Penalty, for more information.

940, 941, 943, 944,945, CT-1, 1042, 720

Dishonored Check Penalty

Assessment Codes Manual- TC 280 Systemic- TC 286 Abatement Codes Manual- TC 281 Systemic- TC 287

A penalty is imposed on dishonored checks or other forms of payment that are returned from a financial institution unpaid. See IRM 20.1.10.7, IRC 6657 - Bad Checks (Dishonored Checks or Other Forms of Payment), for more information.

706, 706-NA, 709, 709-NA, 720, 730, 940, 941, 943, 944, 945, 990-PF, 990-T, 1041, 1042, 1065-B, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, 2290

Information Return Penalty

Assessment Codes Manual- TC 240 Abatement Codes Manual- TC 241

Information Return Penalty - Failure to File Correct Information Returns Due to Intentional Disregard. When any failure, or combination of failures, related to certain Information Returns is due to Intentional Disregard, the penalty rate is increased. The penalty rate per return depends on when the return is due. There is no maximum limitation. PRN 600 is used to assess this penalty. A penalty is also charged when a payee statement is not timely or correctly furnished to recipient. For more information, see IRM 20.1.7, Information Return Penalties.

Fraud

Assessment Codes Manual- TC 320 Abatement Codes Manual- TC 321

Fraud Penalty. A civil fraud penalty will be imposed when there is clear and convincing evidence to prove that some part of the underpayment of tax is due to fraud. The penalty rate is 75% of the underpayment of tax which is attributable to fraud. For more information, see IRM 20.1.5.16, IRC 6663, Civil Fraud Penalty.

706, 706-NA, 709, 709-NA, 720, 730, 940, 941, 943, 944, 945, 990-PF, 990-T, 1041, 1042, 1065-B, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, 2290

Civil Penalty for Frivolous Returns

Assessment Codes Manual- TC 240 Abatement Codes Manual- TC 241

PRN 666 is used to assess this penalty. A penalty is imposed against a person who files a return based on a frivolous position identified under IRC 6702(c). The penalty rate for each return deemed frivolous is $5,000 if filed after March 16, 2007. $500 for income tax returns filed prior to March 17, 2007. For more information, see IRM 20.1.10.12.1, IRC 6702(a) - Civil Penalty for Frivolous Tax Returns.

All BMF returns

Debit (underpayment) Interest

Assessment Codes Manual- TC 340 Systemic- TC 196 Abatement Codes Manual- TC 341 Systemic- TC 197

Debits the tax module for the amount of interest due when a tax module is underpaid. For more information, see IRM 20.2.1, Interest Introduction, Standards and Guidelines, IRM 20.2.5, Interest on Underpayments, IRM 20.2.7, Abatement and Suspension of Underpayment Interest Overview, IRM 20.2.10, Interest on Estate, Excise, Employment and Foreign Taxes, IRM 20.2.11, Miscellaneous Interest Provisions, and IRM 20.2.14, Netting of Overpayment and Underpayment Interest.

Credit Interest

Assessment Codes Manual (Restricted Interest)- TC 770 Systemic- TC 776 Abatement Codes Manual (Restricted Interest)- TC 771 Systemic- TC 777

Credits the Tax Module for the amount of interest due when a Tax Module is overpaid as the result of a credit or an abatement. For more information, see IRM 20.2.4, Overpayment Interest and IRM 20.2.14, Netting of Overpayment and Underpayment Interest.