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Yes. This is interest the IRS paid you on the refund that was paid to you late. Include this with other interest income on your tax return under Form 1099-INT. Continue to enter your interest income even if you dont have the actual Form 1099-INT.
If you dont file your tax return within 60 days of the due date, the minimum penalty is $100 or 100% of the tax due on your return, whichever is less. The penalty for late payment is 1/2% (1/4% for months covered by an installment agreement) of the tax due for each month or part of a month your payment is late.
A late fee of up to Rs 5,000 for people having an annual income of more than Rs 5 lakh can go up to Rs 10,000 if the ITR is filed after December but before March 2023. And if your income exceeds the taxable amount limit, you will not be charged any penalty even if you file your ITR after the deadline.
Internal Revenue Code 6404(g) permits the IRS to waive interest, but two circumstances must be present. First, this only relates to interest on income tax, so that if were talking about estate tax, excise tax, or employment tax, there is no legal authority for the IRS to waive interest.
The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty wont exceed 25% of your unpaid taxes.
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The IRS may abate your penalties for filing and paying late if you can show reasonable cause and that the failure wasnt due to willful neglect. Making a good faith payment as soon as you can, may help to establish that your initial failure to pay timely was due to reasonable cause and not willful neglect.
COVID Penalty Relief You may qualify for penalty relief if you tried to comply with tax laws but were unable due to circumstances beyond your control. If you received a notice or letter, verify the information is correct. If the information is not correct, follow the instructions in your notice or letter.
The IRS sends notices and letters for the following reasons: You have a balance due. You are due a larger or smaller refund. We have a question about your tax return.
To help taxpayers affected by the COVID pandemic, were issuing automatic refunds or credits for failure to file penalties for certain 2019 and 2020 returns.
Here are some tips on how to avoid paying penalty and interest charges: File on time to eliminate the failure-to-file penalty. Pay as much as possible to avoid paying interest on any unpaid balance. Pay as much as you can by the original due date help to minimize the late-payment penalty.

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