If you don’t file or pay your taxes on time or in the correct way, you may face significant penalties in Georgia. The Georgia Department of Revenue manages tax assessment and collections, and any correspondence you receive from them will likely direct you to their website.
If you’ve received a surprise bill or a penalty notice you don’t understand, learn more about tax penalties in Georgia and how you can handle them. Or contact us at Wiggam Law for help now.
Key Takeaways
- The Georgia Department of Revenue charges penalties for failing to pay, failing to file, filing the wrong way, or engaging in fraud.
- Penalties vary in amount, and some penalties are charged every month that you fail to resolve the issue.
- Penalty relief is available in some circumstances, but you must request it from the Department of Revenue.
Common Penalties Assessed by the Department of Revenue
A few penalties make up the majority of penalties assessed by the Department of Revenue. They include:
- Late filing penalty: Individuals and corporations that do not file their tax return by the due date face an immediate penalty of 5% of the tax due, as well as 5% of the balance due for each month that the return is late. This penalty is capped at 25% of the initial balance.
- Late payment penalty: This penalty is charged to those who do not pay their taxes in full by the due date. This is 0.5% of the unpaid amount due, as well as 0.5% of the amount due for each month for which a payment is not made. This penalty is also capped at 25% of the original balance.
- Interest: The Department of Revenue reserves the right to adjust interest rates at the start of each year. Currently, interest on bills is set as the bank loan prime rate by the Federal Reserve plus 3%, which is 10.5% as of June 2025.
- Combined penalty limit: If a taxpayer both fails to file their tax return and fails to pay their tax bill, the combined total cannot exceed 25% of the tax bill.
Penalties Specific to Certain Taxes
The Department of Revenue collects a wide range of taxes, and it may assess different types of penalties for each type of tax.
Individual Income Tax Penalties
- Frivolous return penalty: This penalty is assessed if an individual submits a return that doesn’t have the information needed to determine tax liability. This is often the case when an individual is trying to delay or impede tax collection. The penalty is a flat $1,000.
- Negligent underpayment penalty: When an individual underpays due to negligence or due to disregard of state tax requirements, the state charges 5% of the underpaid amount.
- Fraudulent underpayment penalty: If underpayment is the result of fraud, not error or negligence, the penalty is a full 50% of the underpayment.
- Failure to pay estimated tax penalty: When an individual is required to pay estimated taxes and does not do so, the Department of Revenue charges 9% per year of the underpaid amount, as well as 5% of the imposed income tax for the year.
Corporate Tax
Corporate taxpayers are also subject to frivolous return, negligent underpayment, failure to pay estimated tax, and fraudulent underpayment penalties, just like individual taxpayers. They may also be charged the following penalties if they do not file their corporate net worth return:
- Late filing penalty: 10% of the tax due
- Late payment penalty: 10% of the tax due
Sales and Use Tax
The penalties for failing to report or underreporting sales and use tax are as follows:
- Failure to file penalty: The penalty for failure to file a sales and use tax return is 5% of the tax or $5, whichever is greater; you must also pay this amount for each month that the return is late. The penalty is capped at $25 or 25% of the balance due, whichever is larger.
- Failure to pay penalty: Those who fail to pay on time pay either 5% or $5 upfront, whichever is larger. They must pay this amount for each additional month that payment is late, but the penalty cannot be greater than 25% or $25, whichever number is larger.
- False or fraudulent return penalty: Filing a false or fraudulent return incurs a penalty of 50% of the tax due.
Withholding Tax
Here are the penalties you may face if you have employees and you don’t file or pay withholding tax returns.
- Failure to file penalty: The penalty for failing to file the necessary return is $25 plus 5% of the tax withheld before credits and adjustments are applied. An additional 5% is added for each late month. This penalty is capped at $25 plus 25% of the initial tax withheld prior to adjustments.
- Failure to pay penalty: The penalty is $25 plus 5% of the tax for those who fail to pay. Each month the payment is late, a 5% penalty is added to the balance; if 5% is less than $25, $25 is added instead. The penalty is capped at $25 plus $25 of the withheld tax prior to credits and adjustments.
- Failure to withhold penalty: This penalty is set at $10 per employee and is charged on a quarterly basis.
- Failure to provide W-2s or 1099s to payees or the Department of Revenue by the required date penalty: This penalty adds up quickly; it ranges from $10 to $50 per W-2 and 1099, depending on how late the form is sent. The maximum penalty amount also depends on how late the forms are.
- Fraudulent withholding receipt penalty: The Department of Revenue charges $50 for each fraudulent or false receipt.
- Combined maximum penalty: In any given quarter, if the amount of the late filing and late payment penalties are more than $25 plus 25% of the tax withheld, the total penalty is capped at $25 plus 25%.
Other Taxes
Motor fuel distributors have their own tax penalties. For example, they pay $50 each time they fail to file a return and a 10% penalty when they fail to pay on time. They are also charged the greater of $1000 or 10% per gallon of dyed fuel when they sell, deliver, or consume dyed fuel for highway use.
The Department of Revenue also requires that any taxpayer owing more than $500 in sales and use tax, withholding tax, or motor fuel distributor tax must file their returns and pay their taxes electronically. Failure to do so results in additional penalties. Failing to file electronically results in a penalty of $25 or 5% of the amount due, whichever is greater. Failing to pay electronically results in a 10% penalty.
Your Next Steps After Penalty Charges
When you receive a bill including penalty charges, it’s important to act quickly to limit how much you pay in interest. Additionally, many of these penalties stack up for each month you are late, so paying right away can help you avoid recurring charges.
How to Pay Penalties From the GA DOR
There are several ways to pay your taxes to the Department of Revenue:
- Online: The Department of Revenue generally prefers that fees be paid online. In many cases, you don’t even need to sign up with a login and password to use the Georgia Tax Center—you can just use the number on your bill to pay. However, if you create an account, you can save payment information for future payments. You may pay with your bank account or a credit card (subject to a processing fee).
- By mail: Checks and money orders can be sent to the Georgia Department of Revenue. They maintain a list of tax forms, so verify whether or not you need to send one with your payment to have it processed correctly. Your check or money order should include your taxpayer ID and the tax period for which you are paying.
- Installment agreement: The Department of Revenue does allow some taxpayers to request an installment agreement. You can either request it online via the Georgia Tax Center or by mail by sending in Form GA-9465, Installment Agreement Request.
How to Request Penalty Abatement
In some cases, you can request penalty abatement. However, you do have to demonstrate that you have reasonable cause for your failure to comply with tax law. You may have reasonable cause if your failure to comply was not the result of willful disregard of state tax laws. If you know or could have reasonably been expected to know your filing and payment requirements, reasonable cause does not apply.
In a memo written by the DOR, they provide a variety of examples that may constitute reasonable cause:
- Delay caused by incorrect information given by an employee of the Department of Revenue
- Delay caused by the death or serious illness of the person who is responsible for making payments and filings, or their immediate family member.
- Delay caused by an unavoidable absence of the taxpayer.
- Destruction of business or personal records needed for tax preparation.
- Reliance on competent tax advisors who acted under honest mistake or legal misunderstanding.
- Embezzlement or criminal act by the person responsible for filing a taxpayer’s taxes
If you are uncertain whether or not your situation qualifies for penalty abatement, you may want to discuss your situation with a tax professional. Also, note that a history of compliance with tax regulations may work in your favor. You can request penalty abatement online or by mailing TSD-3, along with supporting documentation.
When It’s Time to Talk to a Tax Attorney
Penalties can dramatically ramp up your tax bill, making it even harder for you to get caught up. If you are unsure if you can afford to pay your taxes, if an installment agreement can help you, or if you qualify for penalty abatement, you may want to discuss your options with a tax attorney. Your tax lawyer can communicate with the Georgia Department of Revenue on your behalf, help you explore payment options, and ensure that your penalty abatement request includes enough supporting documentation to make your case.
If you’re confused and overwhelmed by your Georgia tax problems, it’s time to talk to the team at Wiggam Law. Call us at (404) 233-9800 or use our online scheduler to set up a free call.
