The IRS issues penalties against taxpayers when taxes are not filed or paid. Several types of IRS penalties can be issued, including:
Failure to File: 5% each month or 25% of the unpaid balance
Failure to Pay: .5% each month or 25% of the unpaid balance
Interest Penalty: ~ 4% of the balance
Underpayment Penalty: .5% each month even if the taxes are filed
Taxpayers that are issued these penalties can potentially abate, or rid, themselves of these penalties with the guidance of a tax attorney. A tax attorney can generally cause the IRS to abate or decrease the penalty through reporting of your individual circumstances to the IRS.