IRS Tax Penalties for Businesses

Failure to timely file S Corporation or Partnership income tax return

$200 per month per shareholder up to 12 months.

Failure to file information returns (Form 1099 and W2)

$50 – $100 per return up until July 31. $250 (Form 1099) and $270 (Form W-2) per return beginning August 1.

Underpayment penalty

This penalty is for failing to pay enough in estimated tax by the 15th day of the last month of the year. Compounded daily on the underpayment amount using federal interest rates (currently about 5%).

Late payment penalty

This penalty is for failing to pay the balance due by the original due date of the return. .5% per month up to a maximum of 25% on the balance due for every month the payment is late.

Late filing penalty

This penalty is for failing to timely file or extend your income tax return by the filing date. 5% per month on the balance due up to a maximum of 25% for every month the return is filed after the original or extended due date.