Delinquent Georgia Tax Penalties & Penalty Abatement

ga penalty abatement

Concerning unpaid GA income taxes, Georgia state assesses two penalties that a taxpayer should know. The first is the Late Filing penalty. The state will assess the Late Filing penalty. The state assesses this penalty when a taxpayer does not file a tax return by the due date, including extensions.  The Late Filing penalty is 5% of the tax due. Moreover, the DOR will assess an additional 5% for each extra month the return is late, up to a maximum of 25% of the tax due.

The second penalty is the Late Payment penalty. The Late Payment penalty is 0.5% of the unpaid tax due and an additional 0.5% of the outstanding tax for each extra month. The maximum is up to a maximum of 25% of the tax due.

The combined total of both penalties above cannot exceed 25% of the tax due on the return due date.

Additionally, GA applies interest for each month (or part of a month) that a delinquent tax goes unpaid. The annual rate equal to the Federal Reserve prime rate plus 3% until the taxpayer pays the taxes owed. Interest for months before July 1st, 2016 accrues at a rate of 12% annually or 1% per month.

Consequently, penalties and interest taxpayers do not file or pay when required.  Therefore, a taxpayer should always file their tax return regardless of whether they can pay or pay in full. Moreover, a taxpayer should make a partial payment (if they cannot pay in full). It can help the taxpayer avoid or lessen the impact of the penalties mentioned above and interest.


GA State Interest Abatement

In certain situations, the Commissioner of Georgia’s Department of Revenue may waive the collection of interest charges. GA may waive interest charges in whole or in part on any unpaid taxes. However, generally, this only occurs if he or she determines the delay in the payment of taxes was due to the inaction or action of the DOR. The taxpayer needs to illustrate that the DOR’s actions caused the interest to accrue. Alternatively, the taxpayer can show the DOR failed to act in a manner that caused interest to accrue.

GA State Penalty Abatement

The DOR may consider a full or partial penalty abatement if reasonable cause exists. More specifically, the default giving rise to the penalty must be due to reasonable cause and not due to gross or willful neglect or disregard of the law or regulations or instructions issued according to the law. The DOR states that reasonable cause happens from circumstances beyond the taxpayer’s control.

The DOR provides the following list of possible circumstances that it may consider reasonable cause concerning penalty waivers:

  • The taxpayer had a delay because of erroneous information given to the taxpayer by an employee of the DOR.
  • The taxpayer had a delay because of the death or serious illness of the person or an immediate family member of that person who is responsible for preparing the return or making payment to the DOR.
  • The unavoidable absence of the taxpayer caused a delay.
  • Fire or another casualty of the taxpayer’s place of business/residence or business/personal records caused the delay.
  • Delay was caused by reliance on competent tax advisors where the advisor acted under clear mistake or misunderstanding of the law
  • Taxpayer encountered embezzlement or some other criminal act by the person responsible for filing or paying the taxes which caused the delay.
  • Concerning the late payment penalty, DOR will consider whether the taxpayer paid more than 90% of an income tax liability by the due date of the return.
  • Whether the taxpayer has a good filing history may be considered along with other factors.

Realize that the reasons mentioned above are not the only circumstances in which the DOR will consider penalty abatement. Moreover, in many cases, the DOR will request documentation to substantiate the details. Lastly, if your business seeks penalty abatement for sales tax penalties, read the documentation provided by DOR here.

How To Request GA State Tax Penalty Abatement

To request penalty abatement, the taxpayer may either file Form TSD-3 – Request for Penalty Waiver, or log in to their Georgia Tax Center account and file the request online. While the DOR provides the normal circumstances listed above, the DOR will consider each case on its own merits based on either the information and/or documentation supplied by the taxpayer.

If you need assistance to pursue penalty abatement, reach out to a tax professional that has experience working with the Georgia Department of Revenue.  Or start your search below and select the applicable tax agencies you are having issues with.


Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.

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