Penalty Center
International Tax Penalty Center
Penalties for missed or late international information returns, late partnership and corporate returns, and how reasonable cause, administrative relief and IRS notice responses work.
Penalty relief is never automatic and results depend on the facts. The pages below explain how penalties work and what options may exist — they are not a promise of any outcome.
- Form 5472 penaltyYes, a late, missing or substantially incomplete Form 5472 can trigger a $25,000 penalty even when the business owes no income tax. Additional penalties can follow continued noncompliance after IRS notice. Relief may be available depending on the facts.
- Form 5471 penaltyYes, failing to file a required Form 5471 can lead to a $10,000 penalty and additional continuation penalties after IRS notice. The reporting obligation can exist even without a dividend or additional U.S. income tax. Relief may be available depending on the facts.
- Form 8865 penaltyIt depends: Form 8865 penalties vary with the reporting category and the information omitted. Annual foreign partnership reporting, transfers and ownership changes do not all use the same penalty formula. Relief may be available depending on the facts.
- Form 3520 penaltyIt depends: Form 3520 penalties differ for foreign trust reporting and foreign gifts or inheritances. For covered foreign trust failures, the initial penalty is generally the greater of $10,000 or a percentage of the reportable amount; foreign gift reporting uses a different formula. Relief may be available depending on the facts.
- Form 8938 penaltyYes, missing a required Form 8938 can trigger a $10,000 penalty. Continued failure after IRS notice can increase total filing penalties to $50,000, and other tax-related consequences may apply. Relief may be available depending on the facts.
- FBAR penaltiesIt depends: FBAR penalties distinguish non-willful violations from willful violations, and civil dollar limits are adjusted for inflation. Willful violations can produce much larger penalties, and criminal consequences can arise in serious cases. Relief may be available depending on the facts.
- Late Form 1065 penaltyYes, a partnership can owe a late Form 1065 penalty even when the partnership itself owes no income tax. The penalty generally uses an inflation-adjusted monthly amount for each partner, subject to a 12-month limit. Relief may be available depending on the facts.
- Late corporate return penaltiesIt depends: late Form 1120 and late Form 1120-S use different penalty rules. A C corporation’s basic failure-to-file penalty is generally 5% per month, up to 25% of unpaid tax; an S corporation generally faces an inflation-adjusted per-shareholder monthly penalty. Relief may be available depending on the facts.
- Reasonable cause for penalty reliefIt depends: reasonable cause is a fact-specific basis for relief from certain penalties, not a general exemption from filing duties. The applicable standard depends on the particular penalty and supporting evidence. Relief may be available depending on the facts.
- First-time penalty abatementUsually, first-time abatement is an administrative waiver for eligible failure-to-file, failure-to-pay and failure-to-deposit penalties. It is not a general waiver for international information return penalties, where availability is limited or uncertain and requires separate review. Relief may be available depending on the facts.
- Responding to an IRS penalty noticeUsually, the first step is to read the full notice and record the response deadline, not to assume the penalty is correct or automatically removable. Gather records, identify the assessment and consider a documented reasonable cause statement and any appeal rights. Relief may be available depending on the facts.
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