What are the penalties associated with Form 945?

Last modified 4/10/2023 5:39:00 AM EST

The IRS may impose penalties for the following two reasons:

• Failing to file Form 945 by the due date, which is typically January 31 of the following year, or 
• Failing to pay the required tax can result in penalties and interest charges.

The penalty for failing to file Form 945 on time is 5% of the unpaid tax per month, up to a maximum of 25% of the unpaid tax. The penalty for paying late is 0.5% of the unpaid tax per month, up to a maximum of 25% of the unpaid tax.

If you receive a penalty notice from the IRS, you can request an abatement of the penalty by providing an explanation of reasonable cause to the IRS. However, you should not attach any explanation when e-filing Form 945.