IRS hit Americans with $7B in tax penalties last year after Biden beefed up agency
NY Post
The Internal Revenue Service levied $7 billion in tax penalties last year — nearly four times the $1.8 billion that it assessed in 2022 after the Biden administration swelled the agency’s ranks, according to a report.
The majority of the fines hit those who underpaid their estimated quarterly income taxes such as business owners, gig workers, investors and others who do not typically withhold federal income tax payments from their checks, according to The Wall Street Journal.
In fiscal year 2023, the average estimated tax penalty rose to $500 from $150 from the previous year, according to IRS data cited by the Journal.
If non-employees underpay their quarterly estimates, they are subject to penalties in the form of an interest charge.
Since interest rates have spiked in recent years, the penalty rate has also increased — from just 3% in 2021 to 6% in 2022.
Last year, the rate rose to 8% for the fourth quarter. The increased rate remained in effect through the first two quarters of this fiscal year.
