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IRS HVUT Penalties

Form2290

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When an individual fails to file the tax returns or pay the tax due before the deadline, the law enforces penalties. These IRS penalties are also applicable for filing false or fraudulent returns. For late payments, a taxpayer must face the penalties along with the interest charge. When you can show a reasonable cause for the late payment (or filing), the penalty will not be imposed. When you are filing Form 2290 even after the due date (including the extensions), you need to attach a reasonable cause along with your filing.

The penalties for HVUT non-compliance are bit costly. Check out the IRS penalties and interests when you fail to file the IRS 2290 Form before August 31st in the below table:

Reason

IRS Penalties  & Interests  

When the tax filer fails to pay the Heavy Vehicle Use Tax (HVUT)by the deadline

The penalty is 4.5% of the total HVUT tax, which is due, monthly for up to 5 months.

If the tax filer does not file the tax on time and fails to pay the tax due.

  1. An additional monthly penalty of 0.5% of the total tax due.
  2. Additional interest charges of 0.54% per month accrue as well.

For instance, based on these IRS rates if you owe $ 500 to the IRS and failed to file the tax amount for 5 months. Then, the penalty amount would mount to its maximum by summing all the penalties and interest. After the IRS calculations the penalties along with the tax amount, you owe comes up to $ 638.5, which is a huge amount when compared to the actual tax amount.

What Happens If You Don’t Pay HVUT?

The FHWA, IRS, state and local agents are working together to identify and report the HVUT evasions. Listing down the reasons, out of their investigations:

  • Registering the weight of the vehicle lower than the actual gross taxable weight.
  • Registering a vehicle as an 'exempt vehicle' but using it for private or other commercial activities.
  • Claiming the mileage limit less than 5,000 miles falsely for normal commercial vehicles annually and 7,500 miles for agricultural vehicles.
  • Re-titling of the vehicles continuously.
  • When registering vehicles bribing local and private agents while checking for proof of payment.
  • Failure to remit tax.
  • Forging or falsifying Form 2290 or IRS Stamped Schedule 1.

The IRS, FHWA, State and local agents are working together to identify and address HVUT evasions. HVUT non-compliance for states penalties is even heavier. The Secretary of Transportation can withhold up to 25 % of the Interstate Maintenance funds (23 U.S.C. 104 (b)(5)) when it fails even 1 of it’s compliance reviews.

When an examiner checks and detects non-compliance, the findings must be given to the management in the FHWA division office. The matter will be brought to the attention of the U.S. DOT office of Inspector General (OIG), according to the assessment of FHWA division management. The compliance review report will be delayed once the OIG launches investigation as the information in it might be utilized as evidence during the criminal investigation. After the completion of all criminal investigations and prosecutions, the finding of non-compliance is made public.