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Notice code 05 — Fraud - The penalty is 75% of the tax you didn’t pay due to fraud (50% of the tax you didn’t pay due…
What this IRS notice code means, and what to check before you reply.
What to do next
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05
Read the notice carefully and note any deadline. Gather returns, notices, and payment records. Book a free strategy session before responding if the amount is large, unclear, or collection language appears.
What the IRS language says
Fraud - The penalty is 75% of the tax you didn’t pay due to fraud (50% of the tax you didn’t pay due to fraud on returns required to be filed before 1/1/87, not including extensions. For tax you didn’t pay due to fraud on returns required to be filed before 1/1/89, the penalty includes an additional 50% of the interest charged on the part of your underpayment due to fraud. This additional interest charge is a penalty and cannot be deducted from your federal taxes.
What it usually means
05 is in our IR Manual catalog. Official wording is dense — we translate it for business owners and individuals and map realistic next steps.
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