Tax Preparer Penalties 2025: New Fines, BOI Rules & Deadlines

Tax Preparer Penalties: What’s New in 2025

If you’re a tax preparer, you’ll want to pay close attention. The penalties for not following the rules have gone up for 2025. Here’s what you need to know:

Didn’t give your client a copy of their return? Forgot to sign it? Didn’t keep the right records? The penalty is now $65 per return—up from $60 last year. That might not sound like much, but if you make this mistake a lot, the annual cap is now $32,500 (up by $1,000 from last year).
Negotiating a taxpayer’s refund check? That’s when a preparer takes a client’s refund check and deposits it themselves. This is a big no-no, and the penalty remains a hefty $650 per check. There’s no annual limit on how much you could end up owing for this.

So, if you’re preparing taxes for others, double-check your process. These fines can add up fast.

Section 275: Time Limits for Penalty Proceedings (Now Simpler)

This one’s a big deal for anyone who’s ever worried about how long the tax office can take to slap on a penalty. Before, there were all sorts of complicated deadlines—different ones depending on whether your case was in appeal, revision, or just regular assessment. It was a headache to track.

Starting April 1, 2025, the rules are much clearer: Any penalty order must be issued within six months from the end of the quarter in which either the relevant proceedings are completed or the penalty notice is issued. No more “whichever is later” confusion. This should cut down on arguments about when the penalty process actually started.

But here’s a heads-up: while the timeline for issuing the penalty order is now fixed, there’s still no hard deadline for when the notice itself has to be sent out. That could leave some room for future disputes about what counts as a “reasonable” time to issue a notice.

Late Filing Penalties: Slightly Higher in 2025

If you’re late filing your taxes by more than 60 days, the minimum penalty has gone up to $525 (from $510 last year). The penalty for not paying your taxes on time is still 0.5% of the unpaid tax per month—no change there.

33 Beneficial Ownership Information (BOI) Reporting: Major Update This one’s important for businesses. The BOI reporting requirements have changed significantly for 2025. Here’s the scoop:

U.S. companies and U.S. persons are now exempt from BOI reporting. If you’re a domestic business, you don’t have to worry about these filings anymore.
Foreign companies that have to report BOI have until April 25, 2025, to get their reports in. If you miss the deadline, the penalty is $591 per day until you fix it. There are also possible criminal fines up to $10,000 and even up to two years in prison for willful violations.

Bottom Line

Tax preparers: Double-check your compliance, as penalties are higher and annual caps have increased.
Taxpayers: If you’re late, expect a slightly higher minimum penalty, and remember the 0.5% monthly late payment penalty is still in place.
Everyone: The timeline for penalty orders is now standardized—six months from the end of the relevant quarter. This should make things more predictable, but keep an eye on when notices are issued.
Businesses: Most U.S. entities are now off the hook for BOI reporting, but foreign companies still need to file on time or face steep penalties.