You received this notice because, according to our calculations, you didn't prepay enough of your tax through estimated tax payments, or didn't make them on time. The notice tells you we assessed a penalty for failure to make sufficient timely estimated tax payments.
What you need to do
If you agree with our calculation, you must pay the amount by the due date in the notice in order to avoid additional charges.
You may want to
Review Form 2220 to see if any of the exceptions for computing the penalty apply to you. If any of the exceptions apply, you may be able to lower or eliminate the penalty by following the instructions for the given exception.
Note: Estates and most trusts review Form 2210.
Answers to common questions
How do I have the penalty adjusted?
If an exception applies, and results in a lower penalty, you can ask to have the penalty adjusted. Mail the completed Form 2220 (or Form 2210, if applicable) with a signed statement attesting to its accuracy, to the address listed on the payment stub of the notice. Include your payment for any penalty you computed. If you have a way to fax the form and your statement, you can call 800-829-0115 to obtain a fax number. Please note that you'll need to remain on the phone with the assistor while faxing the documents.
If I have reasonable cause, can you remove or reduce the penalty?
We can't remove or reduce the penalty for reasonable cause. However, we can remove or reduce it to the extent it's directly attributable to erroneous written advice we gave you. To prove this, you must meet both of the following criteria:
- The advice was in direct response to a written request for advice.
- The erroneous advice was not the result of material omissions or misinformation in the written request for advice.
If you believe you meet the criteria above, you must mail a statement, signed under penalty of perjury, outlining how the erroneous advice resulted in the penalty. You must include a copy of both the written request for advice and a copy of the written advice you received in response to your request. Mail the statement and supporting documentation to the address listed on your penalty notice.
Tips for next year
To avoid a similar penalty next year, make sure that you make sufficient timely estimated tax payments so that you have paid the lesser of 100% of this year's tax, or 100% of next year's tax, in four equal payments.
How to get help
- Call the 800, 866 or 888 number listed on the top right corner of your notice.
- Authorize someone (such as an accountant) to contact the IRS on your behalf using Form 2848, Power of Attorney and Declaration of Representative (PDF)
- See if you qualify for help from a Low Income Taxpayer Clinic.