IRS Notice 433 - Interest and Penalty Information

AAA

DEFINITION of 'IRS Notice 433 - Interest and Penalty Information'

A document published by the Internal Revenue Service that outlines the interest rate applied to overpaid or underpaid taxes, as well as the interest rate applied to the underpayment of estimated taxes. The interest rate can vary from time period to time period, but typically ranges from 4-10%. Federal law requires the IRS to determine the interest rate on a quarterly basis, and interest is typically compounded daily (except on late or underpaid estimated taxes).

INVESTOPEDIA EXPLAINS 'IRS Notice 433 - Interest and Penalty Information'

Underpaying personal or business taxes can cost you, and the IRS will continue to charge interest until the amount owed is paid in full. Taxpayers are also subject to a late filing fee for missing the filing deadline, as well as a late payment fee. Taxpayers are allowed to appeal interest in certain circumstances, such as mathematical errors and bad advice from the IRS.

RELATED TERMS
  1. Interest

    1. The charge for the privilege of borrowing money, typically ...
  2. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  3. Underpayment Penalty

    A tax penalty enacted on an individual for not paying enough ...
  4. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  5. Estimated Tax

    Periodic advance payment of taxes which are based upon the amount ...
  6. Audit

    1. An unbiased examination and evaluation of the financial statements ...
Related Articles
  1. 10 Steps To Tax Preparation
    Taxes

    10 Steps To Tax Preparation

  2. How To Appeal Your IRS Audit
    Taxes

    How To Appeal Your IRS Audit

  3. Surviving The IRS Audit
    Taxes

    Surviving The IRS Audit

  4. 10 Money-Saving Year-End Tax Tips
    Taxes

    10 Money-Saving Year-End Tax Tips

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center