IRS Failure to File or Failure to Pay Penalties
The IRS may assess penalties when required tax returns are filed late or when taxes owed aren’t paid by the deadline.
Failure to File Penalty
The Failure to File penalty generally applies when a required tax return is filed after the due date (including extensions).
- Typically 5% of the unpaid tax per month (or part of a month).
- Maximum of 25% of the unpaid tax.
- If more than 60 days late, a minimum penalty may apply (IRS publishes the applicable minimum amounts).
Failure to Pay Penalty
The Failure to Pay penalty generally applies when tax is not paid by the original due date.
- Typically 0.5% of the unpaid tax per month (or part of a month).
- Maximum of 25% of the unpaid tax.
When Both Penalties Apply
- If both apply in the same month, the Failure to File penalty is reduced by the Failure to Pay amount for that month.
- The combined rate for that month is typically 5% total (not 5.5%).
Interest on Unpaid Tax and Penalties
The IRS charges interest on unpaid taxes (and generally on penalties as they accrue). Interest compounds daily and rates are set quarterly.
Penalty Relief (Abatement)
- Reasonable cause
- First Time Abate (FTA), if eligible
- Statutory exceptions, where applicable
Official IRS References
Editor
25 years of experience managing tax, accounting, payroll, and employment-related information portals. Editor of Accounting Portal since 2011.
Read full bio →
Disclaimer
The information provided on Accounting Portal is for general informational and educational purposes only and does not constitute professional accounting, tax, financial, or legal advice.
While we strive for accuracy and timeliness, no representation or warranty is made regarding completeness or reliability. Always consult a qualified professional before making any business, tax, or financial decisions.
Neither Accounting Portal nor its authors are liable for any loss or damage resulting from the use of this information.
© 2026 Accounting Portal. All rights reserved.