Virginia tax penalties at a glance
When you file or pay Virginia taxes late, the Virginia Department of Taxation adds a penalty and charges interest on the unpaid balance. These state penalties are assessed under Virginia law and are entirely separate from any federal IRS penalty on your federal return.
Source: Virginia Department of Taxation (official guidance). Penalty caps and interest rates change — several states reset interest quarterly — so verify the current figure before relying on it.
Getting a Virginia penalty waived
Penalties of $2,000 or less may be waived for extenuating circumstances (fire, death, hospitalization, disaster); amounts over $2,000 go through an offer in compromise. Simple oversights are generally not waived.
Most people who owe a Virginia penalty also owe a federal IRS penalty — and the federal one is usually larger. The good news: federal penalties can often be removed entirely through first-time abatement or reasonable cause. That is the part our practice handles.
The federal side: IRS penalties & Form 843
The IRS does not assess penalties differently in Virginia than anywhere else — failure-to-file, failure-to-pay, and failure-to-deposit penalties are governed by federal law and apply uniformly nationwide. What changes by state is the IRS service center your case routes through. For Virginia, federal abatement requests are processed through the IRS service center in Philadelphia, PA.
The mechanism is the same everywhere: Form 843, mailed with substantiation. The legal grounds are first-time penalty abatement, reasonable cause, statutory exception, or administrative waiver. When abatement is granted, the IRS refunds the penalty and the interest it charged on that penalty.
What our practice does for Virginia taxpayers
We represent clients in all 50 states under IRS Circular 230 authorization. Because federal abatement is state-agnostic, location is rarely a constraint. For Virginia clients specifically, we pull your IRS transcripts (via Form 8821), confirm exactly which penalties were assessed and for which periods, route Form 843 to the Philadelphia, PA service center, and build the reasonable-cause substantiation. The work is contingency-based: if we do not recover, you do not pay.
Start with the calculator on this page — enter your name, email, and rough penalty and interest amounts. We return a refund estimate within one business day and, if you choose to proceed, send the Form 8821 authorization for signature.