Is Interest Paid To The IRS – Deductible?

Michael Lodge

by Michael Lodge

Many times we get new clients in that own businesses or just individuals filing a tax return who have been late or had taxes due that they paid interest to the IRS on.  They will make a strong argument that they should be able to take the interest as a deduction on their tax returns.  Afraid to say, it is not going to happen.  The IRS says no, interest and penalties paid to the IRS is not deductible.

Question: Is the interest amount that we paid to the IRS deductible?

Answer:

Interest and penalties paid to the IRS on federal taxes are not deductible.

For more information, refer to:

  • Items You Cannot Deduct in the Interest Expense chapter in Publication 17, Your Federal Income Tax for Individuals
  • Publication 529, Miscellaneous Deductions

If you have tax help call our office at:  877.778.1770