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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
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, 2023  ...........................................................................................................................................................................7            7
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  didn’t 
you. All days mentioned in the paragraphs below  are           required.  We will  not charge  penalties  if you did not          file  your  return  within  60  days  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 charged  you a penalty because, 
We will also remove your penalty if:                                   payment, whichever is earlier.                             according to our records, you didn’t estimate your tax 
  – you wrote  to  IRS  and asked for  advice  on a            The law allows you to tell the IRS where to apply                  and pay the correct amount of tax due.
     specific issue,                                           your deposits within the tax return period  with a                 Individuals,  Estates, and  Certain Trusts —                                       If  you 
  – you gave IRS complete and accurate information,            deposit  penalty.  You  have  90  days  from the date  of          expect to owe tax of $1,000 or more for the tax year, 
  –  IRS  wrote  back  to  you  and  gave  you  a  specific    the correspondence you received showing the deposit                you must prepay the tax by having tax withheld or by 
     course of action to take or explained what actions        penalty to contact the IRS if you want to specify where to         making estimated tax  payments.We charge a penalty 
     not to take,                                              apply your deposits.                                               when the total tax you pay during the year doesn’t meet 
  – you followed our written advice in the manner we           Also, the law allows the IRS to remove the deposit                 the requirements of the law. 
     outlined, and                                             penalty  if:  (1)  the  penalty  applies  to  the  first  required The law requires you to pay at least 90% of the tax 
  – you were penalized for the written advice we gave          deposit after a required change to your frequency of               shown on your return for the current year or 100% of the 
     you.                                                      deposits, and (2) you file your employment tax returns             tax shown on your return for the prior year, whichever is 
To  have the  penalty removed because of  erroneous            by the due date.                                                   less. Otherwise, you must make estimated tax payments 
written advice from IRS you should:                            Filing  and  Paying  Late -  IRC 6651 —     We charged             each quarter, that is generally 25% of the total amount 
  – complete Form 843, Claim for Refund and Request            penalties for filing and paying late because, according to         you expect to owe for the year.
     for Abatement,                                            our records, you filed your return late and didn’t pay your        Estimated Tax Safe Harbor for Higher Income 
  – request that IRS remove the penalty, and                   tax when it was due.                                               Individuals  - IRC 6654(d)  —                                          For more information 
  – send Form 843 to the IRS Service Center where              The  penalty  for  filing  late  is  5%  of  the  total  tax       on when the estimated tax penalty may be reduced or 
     you  filed  your  return  for  the  year  you  relied  on assessed that was not paid when due. It is charged each            removed, see the instructions for Form 2210 for your tax 
     erroneous advice from the IRS.                            month or part of a month the return is late, for up to 5           year or Publication 505, Tax Withholding and Estimated 
The three documents you must attach to your Form 843           months.                                                            Tax.
are:                                                           The penalty for paying late is initially ½% of the unpaid 
  – a copy of your original request for advice from IRS,       tax shown on the return. It is charged each month or part          Corporations — We charge a penalty for not estimating 
  – a copy of the erroneous written advice from IRS,           of a month following the payment due date until the tax            your tax correctly when the corporation owes $500 or 
     and                                                       is paid. The penalty increases to 1% of the unpaid tax for         more in tax, and the total payments made on time are 
  – a notice (if any) showing the penalty we charged           any tax that is not paid within 10 days after we issue a           less than the required amount.
     that you now wish us to remove.                           notice of intent to levy. However, the total penalty cannot 
                                                               exceed 25%.

           Notice 746 (Rev. 1-2023) 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,               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 $220 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 after January 1, 2023 the penalty 
amounts of tax on time. We used your Record of Tax               on Form 4977 (for tax years before 1993),  Form 941                amount is $220.
Liability to determine where to apply your deposits. We          Schedule B (for tax years 1993 and later), Form 945-               •  For  returns  due between January 1,  2021 and 
applied your deposits  in the  date order  we received           A,  or  Form  943-A. If  you think we should remove or             December 31, 2022 (without regard to extensions) 
them. We figured the penalty on any tax not deposited,           reduce this penalty,  see “Removal of  Penalties —                 the base penalty rate is $210.
deposited late, or not deposited in the correct amounts.         Reasonable  Cause.” Also see Publication  15, Circular             •  For returns due in 2020, the penalty rate is $205 
If you think we should remove or reduce this penalty,            E — Employer’s Tax Guide or Publication 51,   Circular             •  For returns due between  January 31, 2018 and 
see “Removal of Penalties — Reasonable Cause.” Also              A –  Agricultural  Employer’s Tax Guide     for deposit            December 31, 2019, the base penalty rate is $200.
see Publication 15, Circular E — Employer’s Tax Guide            requirements.                                                      •  For returns due on or before December 31, 2017, 
or Publication 51, Circular A — Agricultural Employer’s          Incomplete  Return - IRC 6652 — We charged a                       the base penalty rate is $195.
Tax Guide for deposit requirements.                              penalty  because,  according  to  our  records,  you  didn’t       These penalty amounts are subject to annual inflation 
Dishonored Check or Other Form of Payment - IRC                  file  a  complete  return.  For  Forms  990,  990EZ,  and          adjustments.
6657 —  We charged a penalty because your bank did               990PF, the penalty is: (1) $20 a day for each day your             Filing Incomplete Return – IRC 6698 — We charged 
not honor  your check or other form of payment. For              return is incomplete, if your gross annual receipts are            a penalty because, according  to our records, your 
checks or other forms of payment of $1,250 or more, the          equal  to or less  than $1,094,500.  The penalty  may              partnership return was incomplete and you didn’t give 
penalty is 2% of the amount of the check or other form           not be more than $10,500 or 5% of your gross annual                us the information we requested. The penalty is $220 
of  payment. For  checks  or  other forms  of  payment of        receipts, whichever is less. (2) $105 a day for each day           for each person who was a partner at any time during 
less than $1,250, the penalty is the amount of the check         your return is incomplete, if your gross annual receipts           the tax year, for each month or part of a month, for up 
or other form of payment, or $25, whichever is less. If          exceed  $1,094,500, but the penalty may not be more                to 12 months. If you think we should remove or reduce 
you think we should remove or reduce this penalty, see           than $54,500. For all other forms, the penalty is $10 a            this penalty, see “Removal of Penalties — Reasonable 
“Removal of Penalties - Reasonable Cause.”                       day for each day your return is incomplete. The penalty            Cause.”
                                                                 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      •  For returns due after January 1, 2023 the penalty 
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            amount is $220.
                                                                 this penalty, see “Removal of Penalties — Reasonable               •  For  returns  due between January 1,  2021 and 
Paying Late - IRC 6651  —    We charged a penalty                Cause.”                                                            December 31, 2022 (without regard to extensions) 
because, according to our records, you didn’t pay your                                                                              the base penalty rate is $210.
tax on time. Initially, the penalty is 1/2% of the unpaid        Fraud - IRC 6651(f) —   Late Filing Penalty — The law              •  For returns due in 2020, the  penalty rate is $205. 
tax  for  each  month  or  part  of  a  month  you  didn’t  pay  allows  us  to  increase  the  penalty  for  filing  late  if  you •  For returns due between  January 31, 2018 and 
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%           December 31, 2019, the base penalty rate is $200.
paid late.                                                       of the amount of tax you should have reported on your              •  For returns due on or before December 31, 2017, 
Note: Effective for months beginning after December              tax return for each additional month or part of a month            the base penalty rate is $195.
31, 1999, the failure to  pay tax  penalty (FTP)  for            you didn’t file your return. The total penalty may not be          These penalty amounts are subject to annual inflation 
individuals  who  file  a  tax  return  on  or  before  the  due more than 75% of the tax you didn’t pay.                           adjustments.
date (including extensions), is limited to half the usual        Penalty Removed — We removed  the penalty  we                      Filing Incomplete Return – IRC 6699 — We charged 
rate (0.25% rather than 0.5%) for any month in which an          charged you and we are reviewing your account. We will             a penalty because, according  to our records, your S 
Installment Payment Agreement is in effect.                      let you know the results.                                          corporation return was incomplete and you didn’t give 
If we issue a Notice of Intent to Levy and you don’t                                                                                us the information we requested. The penalty is $220 
pay the balance due within 10 days from the date of the          Penalty on Tips - IRC 6652(b) — We charged a penalty               for each person who was a shareholder  at any time 
notice, the penalty increases to 1% a month.                     because,  according  to  our  records,  you  didn’t  report        during the year, for each month or part of a month the 
If you think we should remove or reduce this penalty,            your tips to your employer. The penalty is 50% of the              return was filed late, for up to 12 months. If you think we 
see “Removal of Penalties — Reasonable Cause.”                   social security or railroad retirement tax on the tips you         should remove or reduce this penalty, see “Removal of 
Failure to Comply With Other Information Reporting               didn’t report. If you think we should remove or reduce             Penalties  —  Reasonable Cause.”
Requirements - IRC 6723 — We charge a penalty when               this penalty, see “Removal of Penalties — Reasonable               •  For returns due after January 1, 2023 the penalty 
you do not comply with specified information reporting           Cause.”                                                            amount is $220.
requirements, including IRC 6109 taxpayer identification         Examining Officer’s Report - IRC 6751(a) —According                •  For  returns  due between January 1,  2021 and 
number (TIN) reporting requirements.                             to our records, your Examining Officer gave you a report           December 31, 2022 (without regard to extensions) 
The penalty is $5 for each missing  TIN the law                  that explained the reason for this penalty.                        the base penalty rate is $210.
                                                                                                                                    •  For returns due in 2020, the  penalty rate is $205. 
requires on returns and statements due by December               Late Payment Penalty Removed — We removed the                      •  For returns due between  January 31, 2018 and 
31, 1989.                                                        late payment penalty we previously charged you.                    December 31, 2019, the base penalty rate is $200.
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                   •  For returns due on or before December 31, 2017, 
should remove or reduce this penalty, see “Removal of            penalty because it appears you made false statement(s)             the base penalty rate is $195.
Penalties — Reasonable Cause.”                                   on your  Form  W-4.  If  you think we should remove or             These penalty amounts are subject to annual inflation 
Filing  Late - IRC 6652(c)  - Exempt Organizations               reduce this penalty,  see “Removal of  Penalties —                 adjustments.
and Certain Trusts. We charged  a penalty  because,              Reasonable Cause.”                                                   – Missing Schedules K-1
                                                                                                                                      – Missing Schedule L (Balance Sheets)
according  to  our  records,  you  filed  your  return  late.    Partnership Late Filing  – IRC 6698  —      We charged               – Missing Schedules K-1 TINs (5 or more)
For Forms 990, 990EZ, and 990PF, the penalty is: (1)             a penalty because, according to our records, you filed               – Missing Schedules K-1 and Schedule L (Balance 
$20 a day for each day your return is late, if your gross        your partnership  return late.  The penalty is $220 for            Sheet)
annual  receipts are equal  to or less than $1,129,000.          each person who was a partner at any time during the                 – Missing Schedules K-1 and Schedule K-1 TINs
The  penalty may  not  be more than $11,000 or  5% of            tax  year,  for each month or  part of  a month that  the            – Missing Schedule L (Balance Sheet) and Schedule 
your gross annual receipts, whichever is less. (2) $110 a        return was filed late, for up to 12 months. If you think we        K-1 TINs
day for each day your return is late, if your gross annual       should remove or reduce this penalty, see “Removal of                – Missing Schedules K-1, Schedule K-1 TINs, and 
receipts exceed $1,129,000.  The  penalty may  not  be           Penalties – Reasonable Cause.”                                     Schedule L (Balance Sheet)
more than $56,000. For all other forms, the penalty is                                                                                – Missing Schedule K
$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            – Missing Schedule K and Schedules K-1
are  subject  to  annual  inflation  adjustment  for  returns    under section 6226(b)(4)(A)(i),  then the pass-through               – Missing  Schedule  K and  Schedule  L (Balance 
due after 2014. If you think we should remove or reduce          partner can be assessed a failure to file penalty under            Sheet)
this penalty, see “Removal of Penalties — Reasonable             section 6698.                                                        – Missing Schedule K and Schedule K-1 TINs (5 or 
Cause.”                                                          •  For returns due after January 1, 2023 the penalty               more)
                                                                 amount is $220.                                                      – Missing Schedule K,  Schedules K-1,  and 
                                                                 •  For  returns  due between January 1,  2021 and                  Schedules L (Balance Sheet)
                                                                 December 31, 2022 (without regard to extensions) 
                                                                 the base penalty rate is $210. 

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

                                                                                        3

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

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