Penalties for Form 1120-POL
Late Filing of Tax Return:
A political organization will be charged a penalty of 5% of the unpaid tax for each month or part of a month that the return is late, with a maximum penalty of 25% of the unpaid pax.
Note: The minimum penalty for returns that are more 60 days late is the smaller amount of the tax due or $135.
Late Payment of Tax:
An organization that fails to pay taxes that are due will be charged a penalty of half of 1% of the unpaid tax for each month or part of a month in which the tax is not paid, with a maximum of 25% of the unpaid tax.
Note: A notice from the IRS pertaining to any penalty would be sent after an organization has filed their return. Once this notice has been received, an organization must reply and provide a reasonable cause that the IRS could accept and not include this explanation when filing their original return.
Other penalties for negligence, substantial understatement of tax, and fraud can also be imposed. See IRC Sections 6662 & 6663 for more details.