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Information About Your Notice, 

Penalty and Interest
The interest rates on underpayment and overpayment of taxes are as follows:
Periods                                                                                                                                                                                            Percentage Rates
                                                                                                                                  Underpayment                                                      Overpayment
January 1, 2011 through March 31, 2011  .....................................................................................................................................................3                     3
April 1, 2011 through September 30, 2011  ...................................................................................................................................................4                     4
October 1, 2011 through March 31, 2016 ......................................................................................................................................................3                     3
April 1, 2016 through March 31, 2018 ...........................................................................................................................................................4                  4
April 1, 2018 through December 31, 2018.....................................................................................................................................................5                      5 
January 1, 2019 through June 30, 2019 ........................................................................................................................................................6                    6
July 1, 2019 through June 30, 2020  .............................................................................................................................................................5                 5
July 1, 2020 through March 31, 2022  ...........................................................................................................................................................3                  3
April 1, 2022 through June 30, 2022 .............................................................................................................................................................4                 4
July 1, 2022 through September 30, 2022 ....................................................................................................................................................5                      5
October 1, 2022 through December 31, 2022 ...............................................................................................................................................6                         6
Beginning January 1, 1999, the interest rate we pay on         daily,  except on late or underpaid  estimated taxes for           Also, we charge interest on fraud and negligence 
any overpayment of taxes, except for corporate taxes,          individuals or corporations.                                       penalties  if the tax returns, including  extensions, are 
is the same as the rate of interest we charge  on the                                                                             due after December 31, 1988. For returns due after 
underpayment of taxes. The law requires us to determine        If you have an underpayment  resulting  from a tax                 December 31, 1989, the Accuracy-Related  Penalty is 
these interest rates quarterly.  From January 1, 1987          motivated transaction (for returns due before January 1,           charged interest from the later of the return due date or 
through December 31, 1998, the interest rate we paid           1990), we charge a special interest rate of 120 percent            extended return due date.
on an overpayment of taxes was one percent less than           of the underpayment rate.                                          We continue to charge interest until you pay the 
the rate of interest we charged on your underpayment           We charge interest on penalties for filing late, paying            amount you owe in full. After December 31, 1990, the 
of taxes. Effective January 1, 1995, we pay a reduced          late, over or understating valuations, and substantially           law  allows us to charge  interest at the underpayment 
rate of interest on  corporate  overpayments  that             understating the tax you owe.                                      rate plus two percent on large corporate underpayments 
exceed $10,000.  This reduced rate is the short-term                                                                              of more than $100,000.
federal  interest rate, plus  ½%. We compound  interest 
About Your Notice                                              Deposit Penalties - IRC 6656                                       When both penalties are charged for the same month, 
                                                               We may charge penalties if  you do not make                        we reduce the penalty for filing late by the penalty for 
You may call your local IRS telephone number if the            required deposits on time, make deposits for less than             paying late for that month.
number shown on your notice is a long-distance call for        the required amount or if you do not use EFTPS when                For returns due before 12/31/2008, if you didn’t file 
you. All days mentioned in the paragraphs below  are           required.  We will  not charge  penalties  if you did not          your return within 60 days of the due date, the minimum 
calendar days, unless specifically stated otherwise.           willfully neglect to make a proper and timely deposit and          penalty is $100 or 100% of the tax due on your return, 
                                                               you have a reasonable cause. For amounts not properly              whichever is smaller. For returns due after 12/31/2008, 
                                                               or timely deposited, the penalty rates are:                        the minimum penalty is the lesser of $135 or 100% of the 
Removal of Penalties                                           2%  —   deposits made 1 to 5 days late,                            tax due. For returns due after 12/31/2015, the minimum 
Reasonable Cause. The law lets us remove or reduce             5%   —   deposits made 6 to 15 days late,                          penalty is the lesser of $205 or 100% of the tax due. For 
the penalties  we explain  in this notice if you have an       10%  —   deposits made 16 days or more late, but on or             returns due after 12/31/2017, the minimum penalty is the 
acceptable reason. If you believe you have reasonable                 before the 10th day after the date of the first             lesser of $210 or 100% of the tax due. For returns due 
cause you may contact  us to explain  the reason(s),                  notice we sent you asking for the tax you owe.              after 12/31/2019, the minimum penalty is the lesser of 
establishing  you used ordinary business care and              10%  —  deposits  made  to  an  unauthorized  financial            $435 or 100% of the tax due (the $450 penalty amount 
prudence to comply with your Federal tax obligations but              institution, or payments made directly to the               is subject to annual inflation adjustments).
were nonetheless unable to do so. We will consider the                IRS, or paid with your tax return.                          If  you  think  we should remove or  reduce  either of 
facts and circumstances presented and will let you know        10%  —  Amounts subject to  electronic deposit                     these penalties, see “Removal of Penalties - Reasonable 
if we accept your explanation as reasonable cause. This               requirements but not deposited using EFTPS.                 Cause.”
procedure does not apply to interest. See Penalty Relief,      15%  —   Amounts still unpaid  more than 10 days                   Underpayment or  Late Payment of  Estimated Tax 
www.irs.gov.                                                          after the date of the first notice the IRS sent             - IRC 6654 —                                                      We charged  you a penalty because, 
                                                                      asking  for the tax due or the day on which 
Erroneous Written Advice from IRS                                     you receive notice and demand for immediate                 according to our records, you didn’t estimate your tax 
We will also remove your penalty if:                                  payment, whichever is earlier.                              and pay the correct amount of tax due.
  – you wrote  to  IRS  and asked for  advice  on a            The law allows you to tell the IRS where to apply                  Individuals,  Estates, and  Certain Trusts —                                       If  you 
     specific issue,                                           your deposits within the tax return period  with a                 expect to owe tax of $1,000 or more for the tax year, 
  – you gave IRS complete and accurate information,            deposit  penalty.  You  have  90  days  from the date  of          you must prepay the tax by having tax withheld or by 
  –  IRS  wrote  back  to  you  and  gave  you  a  specific    the correspondence you received showing the deposit                making estimated tax  payments.We charge a penalty 
     course of action to take or explained what actions        penalty to contact the IRS if you want to specify where to         when the total tax you pay during the year doesn’t meet 
     not to take,                                              apply your deposits.                                               the requirements of the law. 
  – you followed our written advice in the manner we           Also, the law allows the IRS to remove the deposit                 The law requires you to pay at least 90% of the tax 
     outlined, and                                             penalty  if:  (1)  the  penalty  applies  to  the  first  required shown on your return for the current year or 100% of the 
  – you were penalized for the written advice we gave          deposit after a required change to your frequency of               tax shown on your return for the prior year, whichever is 
     you.                                                      deposits, and (2) you file your employment tax returns             less. Otherwise, you must make estimated tax payments 
To  have the  penalty removed because of  erroneous            by the due date.                                                   each quarter, that is generally 25% of the total amount 
written advice from IRS you should:                            Filing  and  Paying  Late -  IRC 6651 —     We charged             you expect to owe for the year.
  – complete Form 843, Claim for Refund and Request            penalties for filing and paying late because, according to         Estimated Tax Safe Harbor for Higher Income 
     for Abatement,                                            our records, you filed your return late and didn’t pay your        Individuals  - IRC 6654(d)  —                                     For more information 
  – request that IRS remove the penalty, and                   tax when it was due.                                               on when the estimated tax penalty may be reduced or 
  – send Form 843 to the IRS Service Center where              The  penalty  for  filing  late  is  5%  of  the  total  tax       removed, see the instructions for Form 2210 for your tax 
     you  filed  your  return  for  the  year  you  relied  on assessed that was not paid when due. It is charged each            year or Publication 505, Tax Withholding and Estimated 
     erroneous advice from the IRS.                            month or part of a month the return is late, for up to 5           Tax.
The three documents you must attach to your Form 843           months.
are:                                                           The penalty for paying late is initially ½% of the unpaid          Corporations — We charge a penalty for not estimating 
  – a copy of your original request for advice from IRS,       tax shown on the return. It is charged each month or part          your tax correctly when the corporation owes $500 or 
  – a copy of the erroneous written advice from IRS,           of a month following the payment due date until the tax            more in tax, and the total payments made on time are 
     and                                                       is paid. The penalty increases to 1% of the unpaid tax for         less than the required amount.
  – a notice (if any) showing the penalty we charged           any tax that is not paid within 10 days after we issue a 
     that you now wish us to remove.                           notice of intent to levy. However, the total penalty cannot 
                                                               exceed 25%.

           Notice 746 (Rev. 10-2022) Catalog Number 63146F Department of the Treasury Internal Revenue Service www.irs.gov

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For  tax years beginning  after December 31, 1993,               Failure to Deposit - IRC 6656 — Federal Tax Deposits               •  For returns due in 2020, the penalty rate is $205 
the law requires corporations to pay their estimated tax         Insufficient/Late and Incomplete Record of Federal                 •  For returns due between  January 31, 2018 and 
in 4 quarterly payments (unless income is seasonal or            Tax Liability  —  We charged a penalty  because it                 December 31, 2019, the base penalty rate is $200.
the corporation used an annualized income method to              appears that you didn’t deposit the correct amounts of             •  For returns due on or before December 31, 2017, 
estimate its tax) based on the lesser of 100% of either          tax on time.                                                       the base penalty rate is $195.
the tax shown on the current year tax return or the prior        Also, your Record  of Federal  Tax Liability  was                  These penalty amounts are subject to annual inflation 
year tax return. Each installment must be at least 25% of        incomplete  or illegible,  or the liability  amounts you           adjustments.
the tax shown on the return.                                     reported  didn’t  equal  the  net  taxes  for  the  tax  period.   S Corporation Late Filing – IRC 6699 —    We charged 
The procedure  for reasonable  cause  does  not                  Therefore, we averaged  the total tax liability  and               a penalty because, according to our records, you filed 
apply  to corporate  estimated  tax penalties.  For more         distributed it  equally throughout the tax  period. We             your S Corporation return late. The penalty is $210 for 
information on when the estimated tax penalty may be             applied  your deposits to the averaged  liabilities  in the        each person who was a shareholder at any time during 
reduced or removed, see Form 2220 and its instructions           date order we received them. We figured the penalty on             the tax year, for each month or part of a month that the 
for your tax year.                                               any tax not deposited, deposited late, or not deposited            return was filed late, for up to 12 months. If you think we 
Failure to Deposit - IRC 6656(b)  — Federal Tax                  in the correct amounts.                                            should remove or reduce this penalty, see “Removal of 
Deposits  Insufficient/Late  — We charged  a penalty             If you believe  we computed  the penalty  incorrectly,             Penalties - Reasonable Cause.”
because  it  appears  that  you  didn’t  deposit  the  correct   please send a complete breakdown of your tax liability             •  For  returns  due between January 1,  2021 and 
amounts of tax on time. We used your Record of Tax               on Form 4977 (for tax years before 1993),  Form 941                December 31, 2022 (without regard to extensions) 
Liability to determine where to apply your deposits. We          Schedule B (for tax years 1993 and later), Form 945-               the base penalty rate is $210.
applied your deposits  in the  date order  we received           A,  or  Form  943-A. If  you think we should remove or             •  For returns due in 2020, the penalty rate is $205 
them. We figured the penalty on any tax not deposited,           reduce this penalty,  see “Removal of  Penalties —                 •  For returns due between  January 31, 2018 and 
deposited late, or not deposited in the correct amounts.         Reasonable  Cause.” Also see Publication  15, Circular             December 31, 2019, the base penalty rate is $200.
If you think we should remove or reduce this penalty,            E — Employer’s Tax Guide or Publication 51,   Circular             •  For returns due on or before December 31, 2017, 
see “Removal of Penalties — Reasonable Cause.” Also              A –  Agricultural  Employer’s Tax Guide     for deposit            the base penalty rate is $195.
see Publication 15, Circular E — Employer’s Tax Guide            requirements.                                                      These penalty amounts are subject to annual inflation 
or Publication 51, Circular A — Agricultural Employer’s          Incomplete  Return - IRC 6652 — We charged a                       adjustments.
Tax Guide for deposit requirements.                              penalty  because,  according  to  our  records,  you  didn’t       Filing Incomplete Return – IRC 6698 — We charged 
Dishonored Check or Other Form of Payment - IRC                  file  a  complete  return.  For  Forms  990,  990EZ,  and          a penalty because, according  to our records, your 
6657 —  We charged a penalty because your bank did               990PF, the penalty is: (1) $20 a day for each day your             partnership return was incomplete and you didn’t give 
not honor  your check or other form of payment. For              return is incomplete, if your gross annual receipts are            us the information we requested. The penalty is $210 
checks or other forms of payment of $1,250 or more, the          equal  to or less  than $1,094,500.  The penalty  may              for each person who was a partner at any time during 
penalty is 2% of the amount of the check or other form           not be more than $10,500 or 5% of your gross annual                the tax year, for each month or part of a month, for up 
of  payment. For  checks  or  other forms  of  payment of        receipts, whichever is less. (2) $105 a day for each day           to 12 months. If you think we should remove or reduce 
less than $1,250, the penalty is the amount of the check         your return is incomplete, if your gross annual receipts           this penalty, see “Removal of Penalties — Reasonable 
or other form of payment, or $25, whichever is less. If          exceed  $1,094,500, but the penalty may not be more                Cause.”
you think we should remove or reduce this penalty, see           than $54,500. For all other forms, the penalty is $10 a            •  For  returns  due between January 1,  2021 and 
“Removal of Penalties - Reasonable Cause.”                       day for each day your return is incomplete. The penalty            December 31, 2022 (without regard to extensions) 
                                                                 may not be more than $5,000. These penalty amounts 
Fraud - IRC 6663 — We charged you a penalty for fraud.           are  subject  to  annual  inflation  adjustment  for  returns      the base penalty rate is $210.
The penalty is 75% of the tax you didn’t pay due to fraud.       due after 2014. If you think we should remove or reduce            •  For returns due in 2020, the  penalty rate is $205. 
                                                                 this penalty, see “Removal of Penalties — Reasonable               •  For returns due between  January 31, 2018 and 
Paying Late - IRC 6651  —    We charged a penalty                Cause.”                                                            December 31, 2019, the base penalty rate is $200.
because, according to our records, you didn’t pay your                                                                              •  For returns due on or before December 31, 2017, 
tax on time. Initially, the penalty is 1/2% of the unpaid        Fraud - IRC 6651(f) —   Late Filing Penalty — The law              the base penalty rate is $195.
tax  for  each  month  or  part  of  a  month  you  didn’t  pay  allows  us  to  increase  the  penalty  for  filing  late  if  you These penalty amounts are subject to annual inflation 
your tax. The penalty can’t be more than 25% of the tax          didn’t file on time because of fraud. The penalty is 15%           adjustments.
paid late.                                                       of the amount of tax you should have reported on your              Filing Incomplete Return – IRC 6699 — We charged 
Note: Effective for months beginning after December              tax return for each additional month or part of a month            a penalty because, according  to our records, your S 
31, 1999, the failure to  pay tax  penalty (FTP)  for            you didn’t file your return. The total penalty may not be          corporation return was incomplete and you didn’t give 
individuals  who  file  a  tax  return  on  or  before  the  due more than 75% of the tax you didn’t pay.                           us the information we requested. The penalty is $210 
date (including extensions), is limited to half the usual        Penalty Removed — We removed  the penalty  we                      for each person who was a shareholder  at any time 
rate (0.25% rather than 0.5%) for any month in which an          charged you and we are reviewing your account. We will             during the year, for each month or part of a month the 
Installment Payment Agreement is in effect.                      let you know the results.                                          return was filed late, for up to 12 months. If you think we 
If we issue a Notice of Intent to Levy and you don’t                                                                                should remove or reduce this penalty, see “Removal of 
pay the balance due within 10 days from the date of the          Penalty on Tips - IRC 6652(b) — We charged a penalty               Penalties  —  Reasonable Cause.”
notice, the penalty increases to 1% a month.                     because,  according  to  our  records,  you  didn’t  report        •  For  returns  due between January 1,  2021 and 
If you think we should remove or reduce this penalty,            your tips to your employer. The penalty is 50% of the              December 31, 2022 (without regard to extensions) 
see “Removal of Penalties — Reasonable Cause.”                   social security or railroad retirement tax on the tips you         the base penalty rate is $210.
Failure to Comply With Other Information Reporting               didn’t report. If you think we should remove or reduce             •  For returns due in 2020, the  penalty rate is $205. 
Requirements - IRC 6723 — We charge a penalty when               this penalty, see “Removal of Penalties — Reasonable               •  For returns due between  January 31, 2018 and 
you do not comply with specified information reporting           Cause.”                                                            December 31, 2019, the base penalty rate is $200.
requirements, including IRC 6109 taxpayer identification         Examining Officer’s Report - IRC 6751(a) —According                •  For returns due on or before December 31, 2017, 
number (TIN) reporting requirements.                             to our records, your Examining Officer gave you a report           the base penalty rate is $195.
The penalty is $5 for each missing  TIN the law                  that explained the reason for this penalty.                        These penalty amounts are subject to annual inflation 
                                                                                                                                    adjustments.
requires on returns and statements due by December               Late Payment Penalty Removed — We removed the                        – Missing Schedules K-1
31, 1989.                                                        late payment penalty we previously charged you.                      – Missing Schedule L (Balance Sheets)
For all missing  TINs in any calendar year, the 
penalty  can’t  be  more  than  $100,000.  If  you  think  we    False W-4 Penalty - IRC 6682 — We charged a $500                     – Missing Schedules K-1 TINs (5 or more)
should remove or reduce this penalty, see “Removal of            penalty because it appears you made false statement(s)               – Missing Schedules K-1 and Schedule L (Balance 
Penalties — Reasonable Cause.”                                   on your  Form  W-4.  If  you think we should remove or             Sheet)
Filing  Late - IRC 6652(c)  - Exempt Organizations               reduce this penalty,  see “Removal of  Penalties —                   – Missing Schedules K-1 and Schedule K-1 TINs
and Certain Trusts. We charged  a penalty  because,              Reasonable Cause.”                                                   – Missing Schedule L (Balance Sheet) and Schedule 
                                                                                                                                    K-1 TINs
according  to  our  records,  you  filed  your  return  late.    Partnership Late Filing  – IRC 6698  —      We charged               – Missing Schedules K-1, Schedule K-1 TINs, and 
For Forms 990, 990EZ, and 990PF, the penalty is: (1)             a penalty because, according to our records, you filed             Schedule L (Balance Sheet)
$20 a day for each day your return is late, if your gross        your partnership  return late.  The penalty is $210 for              – Missing Schedule K
annual  receipts are equal  to or less than $1,094,500.          each person who was a partner at any time during the                 – Missing Schedule K and Schedules K-1
The penalty may not be more than $10,500  or 5% of               tax  year,  for each month or  part of  a month that  the            – Missing  Schedule  K and  Schedule  L (Balance 
your gross annual receipts, whichever is less. (2) $105 a        return was filed late, for up to 12 months. If you think we        Sheet)
day for each day your return is late, if your gross annual       should remove or reduce this penalty, see “Removal of                – Missing Schedule K and Schedule K-1 TINs (5 or 
receipts exceed $1,094,500.  The  penalty may  not  be           Penalties – Reasonable Cause.”                                     more)
more than $54,500. For all other forms, the penalty is                                                                                – Missing Schedule K,  Schedules K-1,  and 
$10 a day for each day your return is late. The penalty          If a pass-through partner of an audited partnership fails 
may not be more than $5,000. These penalty amounts               to timely file the partnership adjustment tracking report          Schedules L (Balance Sheet)
are  subject  to  annual  inflation  adjustment  for  returns    under section 6226(b)(4)(A)(i),  then the pass-through               – Missing Schedule K, Schedules K-1, and Schedule 
due after 2014. If you think we should remove or reduce          partner can be assessed a failure to file penalty under            K-1 TINs
this penalty, see “Removal of Penalties — Reasonable             section 6698.                                                        – Missing Schedule K, Schedule L (Balance Sheet), 
Cause.”                                                          •  For  returns  due between January 1,  2021 and                  and Schedule K-1 TINs
                                                                 December 31, 2022 (without regard to extensions)                     – Missing  Schedule  K, Schedules  K-1, Schedule 
                                                                 the base penalty rate is $210.                                     L (Balance Sheet), and Schedule K-1 TINs (5 or 
                                                                                                                                    more)

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Accuracy-Related Penalty - IRC 6662 — For returns – you made one or more of your deposits to an If you believe we computed the penalty incorrectly,
due after 12/31/89, we charge a 20% penalty on the unauthorized financial institution, paid your tax please complete Form 941 Schedule B, Form 945-A, or
amount of additional tax attributable to Negligence, directly to the IRS, paid the tax with your return, Form 943-A. If you think we should remove or reduce
Substantial Understatement, Substantial Valuation or you did not make your deposit(s) electronically this penalty, see “Removal of Penalties — Reasonable
Misstatement, Substantial Overstatement of Pension as the law requires. We applied your deposits and Cause.” For information on deposit requirements, see
Liabilities, or Substantial Estate or Gift Tax Valuation payments in the date order we received them. Publication 15, Circular E — Employer’s Tax Guide, or
Understatement. The penalty is increased to 40% for a We used your Record of Federal Tax Liability Publication 51, Circular A - Agricultural Employer’s Tax
Gross Valuation Misstatement. to determine where to apply your deposits. We Guide.
For returns due before 1/1/90, the applicable figured the penalty on any tax not deposited, Failure to Deposit - IRC 6656 — Missing or Incorrect
percentage rate varies with the specific penalty and the deposited late, or not deposited in the correct Information and Taxes Paid Directly to IRS — We
amount of the increased tax. amounts. For additional details see Information charged a penalty because your Form 941 Schedule B,
Accuracy-Related Penalty on Understatements with on Failure to Deposit Penalty. your Form 945-A, or your Form 943-A was incomplete
Respect to Reportable Transactions - IRC 6662(A) — Failure to Deposit - IRC 6656 — Taxes Paid Directly and we couldn’t determine if you made your deposits on
For tax years ending after October 22, 2004, we charged to IRS and Missing Information — We charged a time or in the correct amounts.
a penalty for a reportable transaction understatement. penalty because you paid taxes to an unauthorized Therefore, we averaged the liability you reported,
Generally, the penalty is 20 percent of the reportable financial institution, directly to the IRS, with your tax distributed it equally, and applied your deposits in the
transaction understatement. The penalty is increased to return, or you did not make your deposit(s) electronically date order we received them. We figured the penalty on
30 percent if the disclosure requirement in IRC section as the law requires. any tax not deposited, deposited late, or not deposited
6664(d)(3)(A) is not met. Also, your Record of Federal Tax Liability was in the correct amounts.
Accuracy-Related Penalty on Underpayments incomplete or illegible, or the liability amounts you Also, it appears that you paid taxes to an unauthorized
Attributable to Undisclosed Foreign Financial reported didn’t equal the net taxes for the tax period. financial institution, directly to the IRS, with your tax
Asset Understatements - IRC 6662(j) — For tax years Therefore, we averaged the total tax liability and return, or you did not make your deposit(s) electronically
beginning after March 18, 2010, we charged a penalty distributed it equally throughout the tax period. as the law requires. If you believe we computed the
for an undisclosed Foreign Financial Asset. The penalty We applied your deposits and payments to the penalty incorrectly, please complete Form 941 Schedule
is 40% of the portion of any underpayment attributable to averaged liabilities in the date order we received B, Form 945-A or Form 943-A. For additional details see
any undisclosed foreign financial asset understatement. your deposits. We figured the penalty on any tax not Information on Failure to Deposit Penalty.
deposited, deposited late, or not deposited in the correct
Accuracy-Related Penalty on Underpayments amounts. Failure to Deposit - IRC 6656 — Deposits Insufficient/
Attributable to Non-economic Substance If you believe we computed the penalty incorrectly, Late, Taxes Paid Directly to IRS and Incorrect Record
Transactions - IRC 6662(b)(6) - We charged you a please send us a complete breakdown of your tax of Federal Tax Liability — We charged a penalty
penalty due to a disallowance of claimed tax benefits liability on Form 941 Schedule B, or Form 945-A or because, according to our records:
by reason of a transaction lacking economic substance Form 943-A. For additional details see Information on – you didn’t make your tax deposit on time or in the
or failing to meet the requirements of any similar rule Failure to Deposit Penalty. correct amounts,
– you made one or more of your deposits to an
of law. The penalty is 20 percent of the portion of the Failure to Deposit -IRC 6656 — Insufficient Late unauthorized financial institution, paid your tax
underpayment attributable to one or more non-economic Deposits and Taxes Paid Directly to IRS and Missing directly to the IRS, paid the tax with your return, or
substance transactions. The reasonable cause exception Information — We charged a penalty because, you did not make your deposit(s) electronically as
does not apply to any portion of an underpayment that according to our records: the law requires, and your Record of Federal Tax
is attributable to one or more non-economic substance – you didn’t make your tax deposit on time or in the Liability was incomplete or illegible, or the liability
transactions. (For transactions entered into on or after correct amounts, amounts you reported didn’t equal the net taxes
March 31, 2010). – you made one or more of your deposits to an for the tax period.
Accuracy-Related Penalty on Underpayments unauthorized financial institution, paid your tax We averaged your total tax liability, distributed it
Attributable to Non-disclosed Non-economic directly to the IRS, paid the tax with your return, or equally, and applied your deposits and payments to
Substance Transactions - IRC 6662(i) - We charged you did not make your deposit(s) electronically as the averaged liabilities in the date order we received
you a penalty due to a disallowance of claimed tax the law requires, and them. We figured the penalty on any tax not deposited,
benefits by reason of a transaction lacking economic – your Record of Federal Tax Liability was incomplete deposited late, or not deposited in the correct amounts.
substance or failing to meet the requirements of any or illegible, or the liability amounts you reported If you believe we computed the penalty incorrectly,
similar rule of law. The penalty is 40 percent of the didn’t equal the net taxes for the tax period. please complete the enclosed Form 941 Schedule B,
portion of the underpayment attributable to one or more We averaged your total tax liability and distributed it Form 945-A, or Form 943-A. For additional details see
non-disclosed non-economic substance transactions. equally throughout the tax period. Then we applied your Information on Failure to Deposit Penalty below.
The reasonable cause exception does not apply to deposits and payments to the averaged liabilities in the Information on Failure to Deposit Penalty. There is a
any portion of an underpayment that is attributable to date order we received your deposits. We figured the limit to the amount of tax you may pay with your return.
one or more non-disclosed non-economic substance penalty on any tax not deposited, deposited late, or not See the list below.
transactions. (For transactions entered into on or after deposited in the correct amounts.
March 31, 2010). See the Revenue Agent Report for a If you believe we computed the penalty incorrectly, Form 941 series, Form 943, Form 944, and Form 945
detailed explanation of these penalties. please send us a complete breakdown of your tax — You may pay tax of less than $2,500 with your tax
liability on Form 941 Schedule B, or Form 945-A or return.
Failure to Deposit - IRC 6656 - Taxes Paid Directly to Form 943-A. For additional details see Information on
IRS — We charged a penalty because, according to our Failure to Deposit Penalty. Form 1042 — You may pay taxes of less than $200 with
records, you paid your taxes to an unauthorized financial your tax return.
institution, directly to the IRS with your return, or you Ten Percent Penalty for IRC 444 Election - IRC
did not make your deposit(s) electronically as the law 7519(f) — We charged a penalty because we didn’t Form 720 — You may pay taxes of $2,000 or less with
requires. The penalty is 10% of each payment you didn’t receive the full amount of the “required payment” for your tax return.
deposit properly. There is a limit to the amount of tax you your IRC section 444 election on time. The required Form 940 — You may pay taxes of $500 or less with
may pay with your return. See the list below. payment is the value of the tax deferral you receive your tax return.
when you change your tax year under IRC section 444.
Form 941 series, Form 943, Form 944, and Form 945 The penalty is 10% of the part of the payment that Form CT-1 — You may pay taxes of less than $2,500
— You may pay taxes of less than $2,500 with your tax you didn’t pay on time. with your tax return.
return. If the required payment is more than $500 for any If you think we should remove or reduce this penalty,
Form 1042 — You may pay taxes of less than $200 with year you made an IRC section 444 election, you must see “Removal of Penalties — Reasonable Cause.” Also
your tax return. make a payment with Form 8752, Required Payment see Publication 15, Circular E — Employer’s Tax Guide,
or Refund Under Section 7519, by May 15th of the or Publication 51, Circular A — Agricultural Employer’s
Form 720 — You may pay taxes of $2,000 or less with following calendar year. Reasonable Cause doesn’t Tax Guide, for deposit requirements.
your tax return. apply to this 10 percent penalty for tax years beginning
Form 940 — You may pay taxes of $500 or less with on or before August 5, 1997. For tax years beginning Failure to Deposit - IRC 6656 — Deposits Insufficient/
your tax return. after August 5, 1997, if you think we should remove Late and Incorrect Record of Federal Tax Liability
or reduce this penalty, see “Removal of Penalties — — We charged a penalty because, according to our
Form CT-1 — You may pay taxes of less than $2,500 Reasonable Cause.” records, you didn’t deposit your tax using the one-day
with your tax return. deposit rule for liabilities $100,000 or more during a
Failure to Deposit - IRC 6656 — Deposits Insufficient/ deposit period.
If you think we should remove or reduce this penalty, Late and Incorrect Record of Federal Tax Liability — Also, the Record of Federal Tax Liability on your
see “Removal of Penalties — Reasonable Cause.” Also We charged a penalty because it appears that you didn’t return was incomplete and we couldn’t determine if you
see Publication 15, Circular E — Employer’s Tax Guide deposit the correct amounts of tax on time. Our records made your deposits on time or in the correct amounts.
or Publication 51, Circular A — Agricultural Employer’s showed you as a semi-weekly depositor but your Form Therefore, we averaged the liability you reported and
Tax Guide for deposit requirements. 941 Schedule B, Form 945-A, or Form 943-A didn’t have distributed it equally.
Failure to Deposit - IRC 6656 — Insufficient or Late enough information on it for us to determine if you made Since your average amount of monthly liability was
Deposits and Taxes Paid Directly to IRS — We charged your deposits on time or in the correct amounts. $100,000 or more, we placed the liability on the first day
a penalty because according to our records: Therefore, we averaged the liability you reported and of your applicable semi-weekly period. We applied your
– you didn’t deposit the correct amounts of tax on distributed it equally. We then applied your deposits deposits in the date order we received them. We figured
time, and in the date order we received them. We figured the the penalty on any tax not deposited, deposited late, or
penalty on any tax not deposited, deposited late, or not not deposited in the correct amounts.
deposited in the correct amounts.

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For deposits due after December 31, 1989, see Interest Removed-Erroneous Refund
Failure to Deposit - IRC 6656 — Deposits Insufficient/ The law requires us to remove interest up to the date we Status of Your Account
Late and Incorrect Record of Federal Tax. request you to repay the erroneous refund when:
Failure to Deposit - IRC 6656 — Deposits Insufficient/ – you didn’t cause the erroneous refund in any way, Balance Less than $1 — If the amount you owe is less
Late and Incorrect Record of Federal Tax Liability and than $1, you do not have to pay it.
— We charged a penalty because, according to our – the refund doesn’t exceed $50,000. Refund Less than $1 — If your refund is less than $1,
records, you didn’t deposit your tax using the one-day – The IRS may remove or reduce interest on we will send it to you only if you ask for it.
deposit rule for liabilities $100,000 or more during a other erroneous refunds based on the facts and
deposit period. circumstances involved in each case. Refund — We will refund your overpayment (plus
Also, your Form 941 Schedule B, Form 945-A or Form Annual Interest Netting — Effective January 1, 1987 interest when applicable), if you owe no other taxes or
943-A was incomplete and we couldn’t determine if you through December 31, 1998, the interest rate we paid on have no other debts the law requires us to collect.
made your deposits on time or in the correct amounts. any overpayment of taxes was 1% less than the interest This notice is not the result of an examination of your
Therefore, we averaged the liability you reported and rate we charged on the underpayment of taxes. As of return. We notify a taxpayer when we select his/her
distributed it equally. January 1, 1999, the overpayment and underpayment return for examination.
Since your average amount of liability was $100,000 rates of interest that we pay and charge are the same,
or more, we placed the liability on the first day of the except for corporate overpayments. If we refund an
applicable semi-weekly period (eighth-monthly period overpayment with interest and we have to increase the Action Required on Balance Due
for tax years ending on or before December 31, 1992). tax at a later date, we give special consideration to the
We applied your deposits in the date order we received interest on that account. Accounts
them. We figured the penalty on any tax not deposited, On the tax increase made after the refund, we will Payment — Please make your check or money order
deposited late, or not deposited in the correct amounts. charge the lower refund rate of interest (up to the payable to the United States Treasury. Write on your
For deposits due after December 31, 1989, see amount of the refund) for the same time period that we payment your social security number or employer
Failure to Deposit - IRC 6656- Deposits Insufficient/Late paid interest on the overpayment. identification number, the tax period and tax form. Mail
and Incorrect Record of Federal Tax. your payment with the bottom part of your notice in the
Request for Net Interest Rate of Zero - IRC 6621(d)
General Rule — If you owe interest to the IRS on an enclosed envelope or to the address on the front of your
Interest - IRC 6601 underpayment for the same period of time that the IRS notice.
owes you interest on an overpayment, you may be Notice about Partial Payments — Generally, we apply
Interest — We are required by law to charge interest entitled to receive a net interest rate of zero (the same your payment first to tax, then to penalty, and finally to
when you do not pay the amount you owe on time. rate of interest applies to your underpayment as your the interest you owe.
Generally, we charge interest from the due date of overpayment).
your return (regardless of extensions) until you pay the To receive the net interest rate of zero for interest
amount you owe in full, including all interest and any you owed (or paid) the IRS, or interest that we owed (or Additional Tax Concerns
penalty charges. Interest rates are variable and may paid) you before October 1, 1998, you must file a Form
change quarterly. 843, Claim for Refund and Request for Abatement. For Backup Withholding
Corporate interest — If you are a C corporation, and more information on the filing requirements for the Form If you received interest, dividends or patronage dividend
you underpaid your tax by more than $100,000 for any 843, see Revenue Procedure 99-43, 1999-47 I.R.B. 579. income, but you didn’t report the income on your tax
taxable period, we charge additional interest of 2% Revenue Procedure 99-43 and Form 843 are available return and you didn’t pay the tax due on your tax return,
if the full amount shown as due on a notice isn’t paid at www.irs.gov. you could be subject to a special income tax withholding
within 30 days of the notice date. If you don’t pay within To qualify for the net interest rate of zero, the period called Backup Withholding. The IRS may request each
30 days, interest at the higher rate begins on the 31st of limitation for claiming a refund of interest on an payer of that income to begin withholding at a rate of
day after the notice date. Once the additional 2% rate underpayment and the period of limitation for claiming 24% if, after we send you four notices over 210 days, a
begins to apply, we charge the additional interest on all additional interest on an overpayment must have been balance remains due on your account.
underpayments for that type of tax and that tax period open on July 22, 1998. Generally, the period of limitation Federal/State Exchange Program
until you pay your balance in full. for claiming a refund of interest on an underpayment is 3 The Internal Revenue Service has agreements with state
years from the time you filed your tax return, or 2 years
Additional Interest Charges — If the amount you from the time you paid the interest, whichever is later. and certain local tax agencies to exchange information
owe is $100,000 or more, please make sure that we The period of limitation to request additional interest on about federal tax, including increases or decreases. If
receive your payment within 10 business days from an overpayment is 6 years from the date of the refund. this change affects the amount of your state or local
the date of your notice. If the amount you owe is less You must file Form 843 on or before the closing date income taxes, you should file the required state or local
than $100,000, please make sure that we receive your of the later statute of limitation period. Mail Form 843 to: form to report the change.
payment within 21 calendar days from the date of your U.S. Mail:
notice. If we don’t receive full payment within these time Internal Revenue Service
frames, the law requires us to charge interest until you Net Rate Interest Netting Claim
pay the full amount you owe. P.O. Box 9987
Partnership Interest — If the partnership fails to pay Mail Stop 6800
within the applicable grace period after the first notice, Ogden, UT 84409
interest on the balance due will continue to run at the Other than U.S. mail:
standard underpayment rate under IRC 6621(a)(2) Internal Revenue Service
(B) for the first 10 calendar days after the notice and Net Rate Interest Netting Claim
demand date. After that if it is still not paid, interest on 1160 West 1200 South
the balance due will be calculated with an extra 2% rate Mail Stop 6800
until it is paid in full. Ogden, UT 84201
Section 6621(a)(2)(B) adds 3 percentage points to
the Federal short-term rate determined under section If your request for interest netting involves solely interest
6621(b) for purposes of establishing the interest rate on that you owed the IRS or that the IRS owed you on or after
underpayments of tax. October 1, 1998, send Form 843 to the Internal Revenue
Service Center where you filed your most recent federal
Interest Paid income tax return. For more information on these Form
Beginning with tax year 1991, you can no longer deduct 843 filing requirements, see Revenue Procedure 2000-
interest you paid to the United States Treasury as an 26, 2000-24 I.R.B. 1. Revenue Procedure 2000-26 is
itemized deduction on your Form 1040, Schedule A. available at www.irs.gov.
Interest Reduced
If we reduce interest that you previously reported as
a deduction on your tax return, you must report this
reduction of interest as income on your tax return for the
year we reduce it.

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