Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about IRS Tax Penalties and other Tax Relief topics.
DebtHelp.com Tip: The IRS may penalize you if you pay your income taxes with a bad check. The penalty is 2% of the check amount. If the check is less than $750, however, the penalty is the less of $15 or the check amount.
If you can show the IRS that you submitted your check in good faith and with reasonable cause (knowing and thinking the funds were there), you may not be assessed this penalty.
IRS penalties can usually be avoided, in two simple ways. First, you need to have a reasonable cause. You simply need to show the IRS your reasoning behind any treatment of a questionable taxable item found on your income tax return. You need to show the IRS that you had a reasonable cause for doing what you did. You felt it was the best way to treat an item. Use IRS Form 8275 (Disclosure Statement) to state the relevant facts about why you are treating a certain tax item the way you are. Secondly, your reasoning (explanation) must be done in good faith. It must also be made with a good intention. This means that you did not have any intention of misreporting your income taxes to the IRS.
|Sheri Ann Richerson|