The IRS has many civil penalties to encourage voluntary tax compliance of taxpayers.

The Failure to File Return Penalty is 5% of the net amount of tax due on the return for each month the return is delinquent, up to a maximum of 25%. The Failure to Pay Tax Penalty is 0.5% of the tax per month, up to 25%. Accuracy Related Penalty is equal to 20% of the portion of the underpayment attributable to negligence or disregard of rules or regulations, or a substantial understatement of tax.

The non-willful failure to file the FBAR can result in a $10,000 penalty per year. Managerial approval is needed to assert non-willful FBAR penalties up to 50% of the highest aggregate account balance per year. Generally, the willful failure to file FBAR penalty is the greater of either $100,000 or 50% of the highest aggregate account value per year, capped at 100% of the highest aggregate account balance.

The IRS can abate these penalties if the taxpayer can demonstrate reasonable cause and the failure was not due to willful neglect. Reach out to a Washington DC IRS penalty abatement lawyer for assistance in that situation.

Experience & Practice Areas

Mr. Pontius has extensive examination experience with federal and state audits, protests of proposed adjustments and audit reconsideration. He represents clients on tax liens and levies, collection due process hearings, offers in compromises and requests for penalty abatement. He has experience with employment tax issues such as worker classification and the trust fund recovery penalty. Prior to founding Pontius Tax Law, PLLC, Mr. Pontius practiced for five years at Maryland tax controversy law firms in Rockville, Annapolis, and Bethesda. Mr. Pontius has two years’ experience in the international corporate tax group at KPMG in Tysons Corner, Virginia where he researched and analyzed a wide range of complex tax matters in the areas of compliance, provision, planning, and restructuring. At the accounting firm, Mr. Pontius worked with a broad range of U.S. multi-national and foreign-owned clients doing business as corporations and partnerships in the communications, financial services, and defense contractor industries.