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FAQs for Hurricane Victims - Penalty and Interest

(8/25/06) Q: Is there any penalty and interest relief for 2004 returns that had extensions to file until September 15, 2005 (corporations) or October 15, 2005 (individuals)?

A: Any unpaid liability will accrue interest and late payment penalty from March 15, 2005 (corporations) or April 15, 2005 (individuals) through August 28, 2005.  For those eligible for additional relief under Notice 2006-20 and News Release 2006-135, interest and penalty will be relieved from August 29, 2005 through October 16, 2006.  If not full paid by August 28, 2006, interest and late payment penalty will begin to accrue on August 29, 2006 until paid in full.

For those not eligible for additional relief under Notice 2006-20, but eligible for relief under prior guidance, interest and penalty will be relieved from August 29, 2005 through February 28, 2006.  If not full paid by February 28, 2006, interest and late payment penalty will begin to accrue on March 1, 2006 until full paid.  Likewise, if a 2004 return on extension is not filed by February 28, 2006, late filing penalty will begin to accrue on March 1, 2006 until filed.  Because these returns were already on a full six-month extension under section 6081, no further extension of time to file is allowed.


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