Penalties and interest

[oceanlovin'ea]

it is almost 4:30 AM and I am still working. So my mind is not working too well at this point but I want to finish this return.

Interest and penalties------- IRS penalties are not deductible, that much I remember but what about the interest on an unpaid balance? Oh, this is a Schedule C person. Return doesn't have other income. Only the business income. Is it deductible on the Schedule C as interest expense?

I'm thinking no, then I'm thinking yes.....then I'm thinking I need to go to sleep. LOL...

Thanks

Linda, EA

[taxea]

you are right that penalties are not deductible nor is the interest attached to the penalty. The interest on the liability is deductible if this is from business tax liability but not personal tax liability