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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
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
January 1, 2023 through September 30, 2023  .............................................................................................................................................7                              7
Beginning October 1, 2023 ............................................................................................................................................................................8                 8
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  12/31/2015,  if  you  file  the 
you. All days mentioned in the paragraphs below  are           required.  We will  not charge  penalties  if you did not          return more than 60  days late of  the due date, the 
calendar days, unless specifically stated otherwise.           willfully neglect to make a proper and timely deposit and          minimum penalty is $135 or 100% of the tax due on your 
                                                               you have a reasonable cause. For amounts not properly              return, whichever  is smaller. For returns due between 
                                                               or timely deposited, the penalty rates are:                        01/01/2016  and  12/31/2017,  the minimum  penalty  is 
Removal of Penalties                                           2%  —   deposits made 1 to 5 days late,                            the lesser of $205 or 100% of the tax due. For returns 
Reasonable Cause. The law lets us remove or reduce             5%   —   deposits made 6 to 15 days late,                          due between 01/01/2018 and 12/31/2019, the minimum 
the penalties  we explain  in this notice if you have an       10%  —   deposits made 16 days or more late, but on or             penalty is the lesser of $$210 or 100% of the tax due. For 
acceptable reason. If you believe you have reasonable                  before the 10th day after the date of the first            returns due between 01/01/2020  and 12/31/2022, the 
cause you may contact  us to explain  the reason(s),                   notice we sent you asking for the tax you owe.             minimum  penalty is the lesser of $435 or 100% of the 
establishing  you used ordinary business care and              10%  —  deposits  made  to  an  unauthorized  financial            tax due. For returns due after 12/31/2022, the minimum 
prudence to comply with your Federal tax obligations but               institution, or payments made directly to the              penalty is $450 or 100% of the tax due  (the $450 penalty 
were nonetheless unable to do so. We will consider the                 IRS, or paid with your tax return.                         amount is subject to annual inflation adjustments).
facts and circumstances presented and will let you know        10%  —  Amounts subject to  electronic deposit                     If  you  think  we should remove or  reduce  either of 
if we accept your explanation as reasonable cause. This                requirements but not deposited using EFTPS.                these penalties, see “Removal of Penalties - Reasonable 
procedure does not apply to interest. See Penalty Relief,      15%  —   Amounts still unpaid  more than 10 days                   Cause.”
www.irs.gov.                                                           after the date of the first notice the IRS sent            Underpayment or  Late Payment of  Estimated Tax 
                                                                       asking  for the tax due or the day on which 
Erroneous Written Advice from IRS                                      you receive notice and demand for immediate                -  IRC 6654 —                                                         We charge a penalty when you don’t 
We will also remove your penalty if:                                   payment, whichever is earlier.                             estimate your tax 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 
     you.                                                      deposits, and (2) you file your employment tax returns             is less. Otherwise, you must make estimated tax 
To  have the  penalty removed because of  erroneous            by the due date.                                                   payments each quarter,  that  is generally  25% of the 
written advice from IRS you should:                            Filing  and  Paying  Late  -  IRC  6651 —   We  charge             total amount you expect to owe for the year.  There 
  –  complete Form 843, Claim for Refund and Request           penalties  for  filing  and  paying  late  when  you  file  your   are  special  rules  for  farmers,  fishermen,  and  certain 
     for Abatement,                                            return late and don’t pay your tax when it is due.                 higher  income taxpayers. Please  refer to Publication 
  –  request that IRS remove the penalty, and                  The  penalty  for  filing  late  is  5%  of  the  total  tax       505, Tax Withholding and Estimated Tax, for additional 
  –  send Form 843 to the IRS Service Center where             assessed that was not paid when due. It is charged each            information.
     you  filed  your  return  for  the  year  you  relied  on month or part of a month the return is late, for up to 5           Waiver in Certain Cases - IRC 6654(d)(3) — For more 
     erroneous advice from the IRS.                            months.                                                            information on when the estimated tax penalty may be 
The three documents you must attach to your Form 843           The penalty for paying late is initially ½% of the unpaid          reduced or removed, see the instructions for Form 2210 
are:                                                           tax shown on the return. It is charged each month or part          for your tax year or Publication 505, Tax Withholding and 
  –  a copy of your original request for advice from IRS,      of a month following the payment due date until the tax            Estimated Tax.
  –  a copy of the erroneous written advice from IRS,          is paid. The penalty increases to 1% of the unpaid tax for 
     and                                                       any tax that is not paid within 10 days after we issue a           Corporations — We charge a penalty for not estimating 
  –  a notice (if any) showing the penalty we charged          notice of intent to levy. However, the total penalty cannot        your tax correctly when the corporation owes $500 or 
     that you now wish us to remove.                           exceed 25%.                                                        more in tax, and the total payments made on time are 
                                                                                                                                  less than the required amount.

           Notice 746 (Rev. 10-2023) 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,               Incomplete Return - IRC 6652  —   We charge  this                  Filing Incomplete Return – IRC 6698 — We charge a 
the law requires corporations to pay their estimated tax         penalty when you don’t file a complete return. For Forms           penalty when your partnership return is incomplete and 
in 4 quarterly payments (unless income is seasonal or            990, 990EZ, and 990PF, the penalty is: (1) $20 a day               you don’t  provide  us the information  when  requested. 
the corporation used an annualized income method to              for each day your return is incomplete, if your gross              The penalty is $220 for each person who was a partner 
estimate its tax) based on the lesser of 100% of either          annual  receipts are equal  to or less than $1,094,500.            at  any  time during the  tax  year,  for  each month or 
the tax shown on the current year tax return or the prior        The penalty may not be more than $10,500  or 5% of                 part of a month, for up to 12 months. If you think we 
year tax return. Each installment must be at least 25% of        your gross annual receipts, whichever is less. (2) $105 a          should remove or reduce this penalty, see “Removal of 
the tax shown on the return.                                     day for each day your return is incomplete, if your gross          Penalties — Reasonable Cause.”
The procedure  for reasonable  cause  does  not                  annual receipts exceed $1,094,500, but the penalty                 •   For returns due after January 1, 2023 the penalty 
apply  to corporate  estimated  tax penalties.  For more         may not be more  than  $54,500.  For all  other  forms,                amount is $220.
information on when the estimated tax penalty may be             the  penalty is $10 a day for  each day your return is             •   For  returns  due between January 1,  2021 and 
reduced or removed, see Form 2220 and its instructions           incomplete. The penalty may not be more than $5,000.                   December 31, 2022 (without regard to extensions) 
for your tax year.                                               These penalty amounts are subject to annual inflation                  the base penalty rate is $210.
Failure to Deposit - IRC 6656(b)  — Federal Tax                  adjustment for returns due after 2014. If you think we             •   For returns due in 2020, the  penalty rate is $205. 
Deposits Insufficient/Late — We charge penalties for             should remove or reduce this penalty, see   “Removal of            •   For returns due between  January 31, 2018 and 
filing and paying late when you file your return late and        Penalties — Reasonable Cause.”                                         December 31, 2019, the base penalty rate is $200.
don’t pay your tax when it is due. We use your Record of         Fraud - IRC 6651(f) — Late Filing Penalty — The law                •   For returns due on or before December 31, 2017, 
Tax Liability to determine where to apply your deposits.         allows  us  to  increase  the  penalty  for  filing  late  if  you     the base penalty rate is $195.
We apply your deposits in the date order we receive              didn’t file on time because of fraud. The penalty is 15%           These penalty amounts are subject to annual inflation 
them. We figure the penalty on any tax not deposited,            of the amount of tax you should have reported on your              adjustments.
deposited late, or not deposited in the correct amounts.         tax return for each additional month or part of a month            Filing Incomplete Return – IRC 6699 — We charge a 
If you think we should remove or reduce this penalty,            you didn’t file your return. The total penalty may not be          penalty when your S corporation return is incomplete and 
see “Removal of Penalties — Reasonable Cause.” Also              more than 75% of the tax you didn’t pay.                           you don’t provide us information when requested. The 
see Publication 15, Circular E — Employer’s Tax Guide            Penalty Removed — We removed  the penalty  we                      penalty is $220 for each person who was a shareholder 
or Publication 51, Circular A — Agricultural Employer’s          charged you and we are reviewing your account. We will             at any time during the year, for each month or part of a 
Tax Guide for deposit requirements.                              let you know the results.                                          month the return was filed late, for up to 12 months. If 
                                                                                                                                    you think we should remove or reduce this penalty, see 
Dishonored Check or Other Form of Payment - IRC                  Penalty on  Tips  - IRC 6652(b) — We charge this                   “Removal of Penalties  —  Reasonable Cause.”
6657 — We charge a penalty  when your bank does                  penalty when you don’t report your tips to your employer.          •   For returns due after January 1, 2023 the penalty 
not honor  your check or other form of payment. For              The penalty  is 50%  of the social  security or railroad               amount is $220.
checks or other forms of payment of $1,250 or more, the          retirement tax on the tips you didn’t report. If you think         •   For  returns  due between January 1,  2021 and 
penalty is 2% of the amount of the check or other form           we should remove or reduce this penalty, see “Removal                  December 31, 2022 (without regard to extensions) 
of  payment. For  checks  or  other forms  of  payment of        of Penalties — Reasonable Cause.”                                      the base penalty rate is $210.
less than $1,250, the penalty is the amount of the check                                                                            •   For returns due in 2020, the  penalty rate is $205. 
or other form of payment, or $25, whichever is less. If          Examining Officer’s Report - IRC 6751(a) —According                •   For returns due between  January 31, 2018 and 
you think we should remove or reduce this penalty, see           to our records, your Examining Officer gave you a report               December 31, 2019, the base penalty rate is $200.
“Removal of Penalties - Reasonable Cause.”                       that explained the reason for this penalty.                        •   For returns due on or before December 31, 2017, 
Fraud - IRC 6663 — We charge a penalty for fraud. The            Late Payment Penalty Removed — We removed the                          the base penalty rate is $195.
penalty is 75% of the tax you didn’t pay due to fraud.           late payment penalty we previously charged you.                    These penalty amounts are subject to annual inflation 
                                                                                                                                    adjustments.
Paying Late - IRC 6651 —  We charge a penalty when               False W-4 Penalty - IRC 6682 — We charge a $500                      – Missing Schedules K-1
you don’t pay your tax on time. Initially, the penalty is        penalty  when  you make  false  statement(s) on  your                – Missing Schedule L (Balance Sheets)
1/2% of the unpaid tax for each month or part of a month         Form W-4. If you think we should  remove or reduce                   – Missing Schedules K-1 TINs (5 or more)
you don’t pay your tax. The penalty can’t be more than           this penalty, see “Removal of Penalties — Reasonable                 – Missing Schedules K-1 and Schedule L (Balance 
25% of the tax paid late.                                        Cause.”                                                                Sheet)
Note: Effective for months beginning after December                                                                                   – Missing Schedules K-1 and Schedule K-1 TINs
31, 1999, the failure to  pay tax  penalty (FTP)  for            Partnership Late Filing – IRC 6698 —        We charge a 
individuals  who  file  a  tax  return  on  or  before  the  due penalty when you file your partnership return late. The              – Missing Schedule L (Balance Sheet) and Schedule 
date (including extensions), is limited to half the usual        penalty is $220 for each person who was a partner at                   K-1 TINs
rate (0.25% rather than 0.5%) for any month in which an          any time during the tax year, for each month or part of a            – Missing Schedules K-1, Schedule K-1 TINs, and 
Installment Payment Agreement is in effect.                      month that the return was filed late, for up to 12 months.             Schedule L (Balance Sheet)
If we issue a Notice of Intent to Levy and you don’t             If you think we should remove or reduce this penalty, see            – Missing Schedule K
pay the balance due within 10 days from the date of the          “Removal of Penalties – Reasonable Cause.”                           – Missing Schedule K and Schedules K-1
                                                                                                                                      – Missing  Schedule  K and  Schedule  L (Balance 
notice, the penalty increases to 1% a month.                     If a pass-through partner of an audited partnership fails              Sheet)
If you think we should remove or reduce this penalty,            to timely file the partnership adjustment tracking report            – Missing Schedule K and Schedule K-1 TINs (5 or 
see “Removal of Penalties — Reasonable Cause.”                   under section 6226(b)(4)(A)(i),  then the pass-through                 more)
Failure to Comply With Other Information Reporting               partner can be assessed a failure to file penalty under              – Missing Schedule K,  Schedules K-1,  and 
Requirements - IRC 6723 — We charge a penalty when               section 6698.                                                          Schedules L (Balance Sheet)
you do not comply with specified information reporting            • For returns due after January 1, 2023 the penalty                 – Missing Schedule K, Schedules K-1, and Schedule 
requirements, including IRC 6109 taxpayer identification            amount is $220.                                                     K-1 TINs
number (TIN) reporting requirements.                              • For  returns  due between January 1,  2021 and                    – Missing Schedule K, Schedule L (Balance Sheet), 
The penalty is $50  for each  missing  TIN the law                  December 31, 2022 (without regard to extensions)                    and Schedule K-1 TINs
requires on returns and statements due.                             the base penalty rate is $210.                                    – Missing  Schedule  K, Schedules  K-1, Schedule 
For all missing  TINs in any calendar year, the                   • For returns due in 2020, the penalty rate is $205                   L (Balance Sheet), and Schedule K-1 TINs (5 or 
penalty  can’t be more than $100,000.  If you think we            • For returns due between  January 31, 2018 and                       more)
should remove or reduce this penalty, see “Removal of               December 31, 2019, the base penalty rate is $200.
Penalties — Reasonable Cause.”                                    • For returns due on or before December 31, 2017,                 Accuracy-Related Penalty - IRC 6662 —     For returns 
                                                                    the base penalty rate is $195.                                  due after  12/31/89, we charge a 20% penalty on the 
Filing Late - IRC 6652(c) - Exempt Organizations and              These penalty amounts are subject to annual inflation             amount of additional  tax attributable to Negligence, 
Certain Trusts. We charge this penalty when you file             adjustments.                                                       Substantial Understatement, Substantial Valuation 
your return late. For Forms 990, 990EZ, and 990PF, the                                                                              Misstatement, Substantial  Overstatement of Pension 
penalty is: (1) $20 a day for each day your return is late,      S Corporation Late Filing – IRC 6699 — We charge a                 Liabilities, or  Substantial Estate  or  Gift  Tax  Valuation 
if your gross annual receipts are equal to or less than          penalty when you file your S Corporation return late. The          Understatement. The penalty is increased to 40% for a 
$1,129,000. The penalty may not be more than $11,000             penalty is $220 for each person who was a shareholder              Gross Valuation Misstatement. 
or 5% of your gross annual receipts, whichever is less.          at any time during the tax year, for each month or part of         For returns due before 1/1/90, the applicable 
(2) $110 a day for each day your return is late, if your         a month that the return was filed late, for up to 12 months.       percentage rate varies with the specific penalty and the 
gross annual receipts exceed $1,129,000. The penalty             If you think we should remove or reduce this penalty, see          amount of the increased tax.
may not be more than $56,000. For all other forms, the           “Removal of Penalties - Reasonable Cause.”
penalty is $10 a day for each day your return is late. The        • For returns due after January 1, 2023 the penalty               Accuracy-Related Penalty on Understatements with 
penalty may  not  be more than $5,000. These penalty                amount is $220.                                                 Respect to Reportable Transactions - IRC 6662(A) — 
amounts are subject to annual inflation adjustment for            • For  returns  due between January 1,  2021 and                  For tax years ending after October 22, 2004, we charge 
returns due after 2014. If you think we should remove               December 31, 2022 (without regard to extensions)                a penalty for a reportable transaction understatement. 
or reduce this penalty,  see “Removal of  Penalties —               the base penalty rate is $210.                                  Generally,  the  penalty  is  20 percent of  the  reportable 
Reasonable Cause.”                                                • For returns due in 2020, the penalty rate is $205               transaction understatement. The penalty is increased to 
                                                                  • For returns due between  January 31, 2018 and                   30 percent if the disclosure requirement in IRC section 
                                                                    December 31, 2019, the base penalty rate is $200.               6664(d)(3)(A) is not met.
                                                                  • For returns due on or before December 31, 2017, 
                                                                    the base penalty rate is $195.
                                                                  These penalty amounts are subject to annual inflation 
                                                                 adjustments.

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Accuracy-Related Penalty on Underpayments Form 940 — You may pay taxes of $500 or less with Interest Removed-Erroneous Refund
Attributable to Undisclosed Foreign Financial your tax return. The law requires us to remove interest up to the date we
Asset Understatements - IRC 6662(j) — For tax years Form CT-1 — You may pay taxes of less than $2,500 request you to repay the erroneous refund when:
beginning after March 18, 2010, we charge a penalty for with your tax return. – you didn’t cause the erroneous refund in any way,
an undisclosed Foreign Financial Asset. The penalty is and
40% of the portion of any underpayment attributable to If you think we should remove or reduce this penalty, – the refund doesn’t exceed $50,000.
any undisclosed foreign financial asset understatement. see “Removal of Penalties — Reasonable Cause.” Also – The IRS may remove or reduce interest on
Accuracy-Related Penalty on Underpayments see Publication 15, Circular E — Employer’s Tax Guide, other erroneous refunds based on the facts and
Attributable to Non-economic Substance or Publication 51, Circular A — Agricultural Employer’s circumstances involved in each case.
Transactions - IRC 6662(b)(6) - We charge a penalty Tax Guide, for deposit requirements. Annual Interest Netting — Effective January 1, 1987
due to a disallowance of claimed tax benefits by reason Failure to Deposit - IRC 6656 — Deposits Inufficientat/ through December 31, 1998, the interest rate we paid on
of a transaction lacking economic substance or failing Late - One-Day Deposit Rule — We charge a penalty any overpayment of taxes was 1% less than the interest
to meet the requirements of any similar rule of law. The when, you don’t deposit your tax using the one-day rate we charged on the underpayment of taxes. As of
penalty is 20 percent of the portion of the underpayment deposit rule for liabilities $100,000 or more during a January 1, 1999, the overpayment and underpayment
attributable to one or more non-economic substance deposit period. rates of interest that we pay and charge are the same,
transactions. The reasonable cause exception does Also, we charge this penalty when the Record of except for corporate overpayments. If we refund an
not apply to any portion of an underpayment that is Federal Tax Liability on your return is incomplete and overpayment with interest and we have to increase the
attributable to one or more non-economic substance we are unable to determine if you make your deposits tax at a later date, we give special consideration to the
transactions. (For transactions entered into on or after on time or in the correct amounts. We figure this penalty interest on that account.
March 31, 2010). by averaging the liability you report and distributing it On the tax increase made after the refund, we will
Accuracy-Related Penalty on Underpayments equally. charge the lower refund rate of interest (up to the
Attributable to Non-disclosed Non-economic When your average amount of monthly liability is amount of the refund) for the same time period that we
Substance Transactions - IRC 6662(i) - We charge $100,000 or more, we place the liability on the first day paid interest on the overpayment.
a penalty when there is a disallowance of claimed tax of your applicable semi-weekly period. We apply your Request for Net Interest Rate of Zero - IRC 6621(d)
benefits by reason of a transaction lacking economic deposits in the date order we receive them. We figure General Rule — If you owe interest to the IRS on an
substance or failing to meet the requirements of any the penalty on any tax not deposited, deposited late, or underpayment for the same period of time that the IRS
similar rule of law. The penalty is 40 percent of the not deposited in the correct amounts. owes you interest on an overpayment, you may be
portion of the underpayment attributable to one or more For deposits due after December 31, 1989, see entitled to receive a net interest rate of zero (the same
non-disclosed non-economic substance transactions. Failure to Deposit - IRC 6656 — Deposits Insufficient/ rate of interest applies to your underpayment as your
The reasonable cause exception does not apply to Late and Incorrect Record of Federal Tax. overpayment).
any portion of an underpayment that is attributable to To receive the net interest rate of zero for interest
one or more non-disclosed non-economic substance you owed (or paid) the IRS, or interest that we owed (or
transactions. (For transactions entered into on or after Interest - IRC 6601 paid) you before October 1, 1998, you must file a Form
March 31, 2010). See the Revenue Agent Report for a 843, Claim for Refund and Request for Abatement. For
detailed explanation of these penalties. Interest — We are required by law to charge interest more information on the filing requirements for the Form
when you do not pay the amount you owe on time. 843, see Revenue Procedure 99-43, 1999-47 I.R.B. 579.
Ten Percent Penalty for IRC 444 Election - IRC 7519(f) Generally, we charge interest from the due date of Revenue Procedure 99-43 and Form 843 are available
— We charge a penalty when we don’t receive the full your return (regardless of extensions) until you pay the at www.irs.gov.
amount of the “required payment” for your IRC section amount you owe in full, including all interest and any To qualify for the net interest rate of zero, the period
444 election on time. The required payment is the value penalty charges. Interest rates are variable and may of limitation for claiming a refund of interest on an
of the tax deferral you receive when you change your tax change quarterly. underpayment and the period of limitation for claiming
year under IRC section 444. additional interest on an overpayment must have been
The penalty is 10% of the part of the payment that Corporate interest — If you are a C corporation, and
you didn’t pay on time. you underpay your tax by more than $100,000 for any open on July 22, 1998. Generally, the period of limitation
If the required payment is more than $500 for any taxable period, we charge additional interest of 2% for claiming a refund of interest on an underpayment is 3
year you made an IRC section 444 election, you must if the full amount shown as due on a notice isn’t paid years from the time you filed your tax return, or 2 years
make a payment with Form 8752, Required Payment within 30 days of the notice date. If you don’t pay within from the time you paid the interest, whichever is later.
or Refund Under Section 7519, by May 15th of the 30 days, interest at the higher rate begins on the 31st The period of limitation to request additional interest on
following calendar year. Reasonable Cause doesn’t day after the notice date. Once the additional 2% rate an overpayment is 6 years from the date of the refund.
apply to this 10 percent penalty for tax years beginning begins to apply, we charge the additional interest on all You must file Form 843 on or before the closing date
on or before August 5, 1997. For tax years beginning underpayments for that type of tax and that tax period of the later statute of limitation period. Mail Form 843 to:
after August 5, 1997, if you think we should remove until you pay your balance in full. U.S. Mail:
or reduce this penalty, see “Removal of Penalties — Additional Interest Charges — If the amount you Internal Revenue Service
Reasonable Cause.” owe is $100,000 or more, please make sure that we Net Rate Interest Netting Claim
Failure to Deposit - IRC 6656 — Deposits Insufficient/ receive your payment within 10 business days from P.O. Box 9987
Late, Taxes Paid Directly to IRS and Incorrect Record the date of your notice. If the amount you owe is less Mail Stop 6800
of Federal Tax Liability — We charge a penalty when: than $100,000, please make sure that we receive your Ogden, UT 84409
– you don’t make your tax deposit on time or in the payment within 21 calendar days from the date of your Other than U.S. mail:
correct amounts, notice. If we don’t receive full payment within these time Internal Revenue Service
– you make one or more of your deposits to an frames, the law requires us to charge interest until you Net Rate Interest Netting Claim
unauthorized financial institution, pay your tax pay the full amount you owe. 1160 West 1200 South
directly to the IRS, pay the tax with your return, or Partnership Interest — If the partnership fails to pay Mail Stop 6800
– you do not make your deposit(s) electronically as within the applicable grace period after the first notice, Ogden, UT 84201
the law requires, and interest on the balance due will continue to run at the If your request for interest netting involves solely interest
– your Record of Federal Tax Liability is incomplete standard underpayment rate under IRC 6621(a)(2) that you owed the IRS or that the IRS owed you on or after
or illegible, or the liability amounts you report don’t (B) for the first 10 calendar days after the notice and October 1, 1998, send Form 843 to the Internal Revenue
equal the net taxes for the tax period. demand date. After that if it is still not paid, interest on Service Center where you filed your most recent federal
We figure the penalty on any tax not deposited, the balance due will be calculated with an extra 2% rate income tax return. For more information on these Form
deposited late, or not deposited in the correct amounts. until it is paid in full. 843 filing requirements, see Revenue Procedure 2000-
We compute this penalty by averaging your total tax Section 6621(a)(2)(B) adds 3 percentage points to 26, 2000-24 I.R.B. 1. Revenue Procedure 2000-26 is
liability, and applying your deposits and payments to the the Federal short-term rate determined under section available at www.irs.gov.
averaged liabilities in the date order we receive them. 6621(b) for purposes of establishing the interest rate on
If you believe we computed the penalty incorrectly, underpayments of tax.
please complete the enclosed Form 941 Schedule B,
Form 945-A, or Form 943-A. For additional details see Interest Paid Status of Your Account
Information on Failure to Deposit Penalty below. Beginning with tax year 1991, you can no longer deduct Balance Less than $1 — If the amount you owe is less
Information on Failure to Deposit Penalty. There is a interest you paid to the United States Treasury as an than $1, you do not have to pay it.
limit to the amount of tax you may pay with your return. itemized deduction on your Form 1040, Schedule A.
Refund Less than $1 — If your refund is less than $1,
See the list below. Interest Reduced we will send it to you only if you ask for it.
Form 941 series, Form 943, Form 944, and Form 945 If we reduce interest that you previously reported as Refund — We will refund your overpayment (plus
— You may pay tax of less than $2,500 with your tax a deduction on your tax return, you must report this interest when applicable), if you owe no other taxes or
return. reduction of interest as income on your tax return for the have no other debts the law requires us to collect.
year we reduce it.
Form 1042 — You may pay taxes of less than $200 with This notice is not the result of an examination of your
your tax return. return. We notify a taxpayer when we select his/her
Form 720 — You may pay taxes of $2,000 or less with return for examination.
your tax return.

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Action Required on Balance Due                             Additional Tax Concerns
Accounts                                                   Backup Withholding
Payment — Please make your check or money order            If you receive interest, dividends or patronage dividend 
payable  to the United States  Treasury. Write on your     income, but  you don’t report the income on your tax 
payment your social security number or employer            return and you don’t pay the tax due on your tax return, 
identification number, the tax period and tax form. Mail   you could be subject to a special income tax withholding 
your payment with the bottom part of your notice in the    called Backup Withholding. The IRS may request each 
enclosed envelope or to the address on the front of your   payer of that income to begin withholding at a rate of 
notice.                                                    24% if, after we send you four notices over 210 days, a 
                                                           balance remains due on your account.
Notice about Partial Payments — Generally, we apply        Federal/State Exchange Program
your payment first to tax, then to penalty, and finally to The Internal Revenue Service has agreements with state 
the interest you owe.                                      and certain local tax agencies to exchange information 
                                                           about federal tax, including increases or decreases. If 
                                                           this  change  affects  the  amount  of  your  state  or  local 
                                                           income taxes, you should file the required state or local 
                                                           form to report the change.

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