A fine is imposed by a court when you are convicted of a criminal offence.
A penalty is issued by an appropriate authority when you have not complied with the law but you have not committed a criminal offence. This means you do not get a criminal record e.g. parking and fare evasion. If you fail to pay the penalty, you will have to go to court and may then have to pay a fine and get a criminal record.
Interest Interest is calculated based on how much tax you owe. Interest rates change every three months. Currently, the IRS interest rate for underpayment of tax is % per year. The interest is calculated for each day your balance due is not paid in full.