Accuracy-Related Penalty
A penalty for underpaying the tax shown on a return. Two common forms: negligence, and substantially understating income tax.
Full Definition
The IRS states an accuracy-related penalty "may apply if you underpay the tax required to be shown on your return", and that underpayment may happen if you do not report all your income or claim deductions or credits you do not qualify for.
It names two common forms for individuals.
Negligence or disregard of the rules or regulations. The IRS defines negligence as not making a reasonable attempt to follow the tax laws when preparing a return, and disregard as carelessly, recklessly or intentionally ignoring tax rules. It gives two examples of what may indicate negligence: not including income shown on an information return such as a Form 1099, and not checking the accuracy of a deduction or credit that seems too good to be true.
Substantial understatement of income tax. The IRS states that for individuals a substantial understatement exists, and the penalty applies, "if you understate your tax liability by 10% of the tax required to be shown on your tax return or $5,000, whichever is greater". Where a Section 199A Qualified Business Income Deduction is claimed, it states the figure is 5% or $5,000, whichever is greater.
Relief is a different route from the failure-to-file and failure-to-pay penalties. The IRS states that for an accuracy-related penalty it considers reasonable cause and good faith, weighing the efforts you made to report the correct tax, the complexity of the issue, your education, experience or knowledge of tax law, and the steps you took to understand the obligation or seek advice.
What to do next
If the penalty is on a notice, the first question is which of the two it is — negligence and substantial understatement are established differently, and the reasonable-cause factors the IRS weighs for an accuracy-related penalty are its own list.
What this page does not say
- The IRS states administrative relief — First Time Abate, and the Automatic Exemption from Penalty replacing it — covers failure to file, failure to pay and failure to deposit. The accuracy-related penalty is not on that list. This page does not assert that it is excluded; it states what the published list contains.
Sources
- Accuracy-related penalty — Internal Revenue Service, retrieved 2026-08-21
- Penalty relief for reasonable cause — Internal Revenue Service, retrieved 2026-08-20
Last reviewed 2026-08-21 by Tax Resolution Clarity editorial.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice.
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Where to go next
The IRS publishes the rules this page describes. Your own notice governs your dates.