Do IRS Allow Waiver on Penalties For late Filing HVUT Form 2290?

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Firstly let us know the IRS ruling for filing excise duty form 2290. The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions of Form 2290. The reporting period is from July 1st in any given year to June 30th next year

Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehicles must e-file. A list of IRS-approved software providers can be found on IRS.gov.

Therefore IRS is imposing penalties and interest for late filing of form 2290 and it will be an unpleasant experience for industrious truck operators. But there are always valid reasons that the truck operators may use to overcome this malady and thus can reduce the damage.

 

What are IRS form 2290 excise duty penalties?

As mentioned above IRS is keen on following up of the rules and regulations of Tax laws as laid down by the Federal Government. Therefore they impose penalties and interest for late filing of form 2290 as like in any other IRS forms they do when tax payers deviate the law that too now with the best of online technologies like electronic-filing of IRS forms now in vogue will certainly expose the defaulters. The exact penalty and interest amount is hard to determine or calculate as only IRS does things according to the structured law. Normally the defaulter that is who are filing the form 2290 beyond the deadline date will only e-file form 2290 at the original tax rates applicable. But for IRS as per their document states- “The Heavy Vehicle Use Tax Funding our Nation’s Highway Programs and Leveling the Playing Field”- Form 2290 tax penalties are broken up into two distinct parts.

Penalties

IRS calculates on monthly basis the total penalty on taxes which is about 4.5% of the total tax due. If one truck weighs at 80,000 lbs and failing to e-file form 2290 with one month delay then the calculation will be $550 x 4.5% = $24.75.

IRS may add penalties up for five months. This will mean that your penalties would go up to $120 further to your original tax rate of $550.This may impact as a great financial burden especially for small truck owners as well as big operators reporting more than 25 heavy vehicles.

Interest

IRS may charge interest of 5% per month on top of the penalties if there are five months delayed filing of form 2290 for which the amount would work out to $150 plus the original tax amount of $550 finally may works out to $700. By this action of IRS, the truck operators may end up in a big tax burden.

Probable Requests with IRS for waiver on penalties - 

For the operator with one month delayed filing of form 2290, it may be possible to get a waiver on penalties and interest. In most often and in genuine cases IRS was reasonable to have allowed the waiver. Also if the truck operator is one time defaulter but had good past history of filing excise tax form 2290 for three previous years usually get the penalties and interest waived. One has to genuinely request IRS in this case. But second time default for filing form 2290, most usually IRS may happen to allow a waiver but not without a solid reasonable cause.

Reasonable cause

One can’t create a cause to have a waiver for penalties and interest towards form 2290 in their favour.But most often, truck operators may encounter with following reasonable causes-some examples Viz.,due date change notification notice not received Natural disaster, tax-payer hospitalized, a death in the family could help justify as reasons but a proof may be required in all these conditions for IRS to respond and it is at the discretion of IRS finally whether to allow the waiver on penalties and interest charged towards late filing of form 2290.

However one can check out Internal Revenue Code Publication 510 – for full detail on excise tax regulations regarding interest, penalties and reasons for them to be waived. See chapter 13, page 42-43.

Last but not least, if a tax payer wants to avoid penalties and interest completely the best way is to e-file the excise duty form 2290 early in July.

REGISTER HERE and file your 2290 Form

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