Return Information Notice - Code 05
We reduced your refund because of penalties, fees and interest imposed on the tax year. We used information provided on your return, schedules, forms, and other attachments.
Why did I receive this notice code?
We imposed a penalty and/or interest on the tax year identified on your notice. The following is a list of penalties that we impose:
- An estimated tax penalty will be charged if you do not pay, pay late, or underpay an estimated tax installment. We calculate the penalty on the unpaid amount from the due date of the estimated tax installment to the date we receive your payment or to the due date of the return, whichever is earlier.
- An underpayment penalty will be charged when taxes are not paid by the due date. The penalty is 5 percent of the unpaid tax as of the due date plus 1/2 percent of 1 percent each month, or part of a month the tax remains unpaid, not to exceed 40 months. The maximum penalty is 25 percent of the total unpaid tax.
- A late filing penalty will be charged on unpaid taxes if a return is filed late. The penalty is 5 percent of the unpaid tax due for every month that the return is late, up to a maximum penalty of 25 percent of the unpaid tax. The minimum penalty is $100 or 100 percent of the unpaid tax, whichever is less.
Refer to Publication 1140 for more information on penalties, interest, and for the Taxpayer Bill of Rights.
Interest will be charged on any delinquent or late payment from the original due date of the return to the date paid. In addition, if other penalties are not paid within 15 days of the date of the notice, interest will be charged from the date of the billing notice until the date of payment. Interest compounds daily and the interest rate is adjusted twice a year.
What do I need to do?
If you agree, pay the balance due in full.
If you do not agree, please contact us.
General Information about your notice.