Tax Dictionary – Failure to File Penalty

IRS Definition

A failure to file penalty is charged on returns filed after the due date or extended due date, absent a reasonable cause for filing late.

  • The combined penalty is 5% (4.5% late filing and 0.5% late payment) for each month or part of a month that your return was late, up to 25%.
  • The late filing penalty applies to the tax that remains unpaid after the due date. Unpaid tax is the total tax shown on your return reduced by amounts paid through withholding, estimated tax payments, and allowed refundable credits.
  • If after five months you still haven’t paid, the failure to file penalty will max out, but the failure to pay penalty continues until the tax is paid, up to 25%.
  • The maximum total penalty for failure to file and pay is 47.5% (22.5% late filing and 25% late payment) of the tax.
  • However, if your return was over 60 days late, the minimum failure to file penalty is the smaller of $205 or 100% of the tax required to be shown on the return.

More from H&R Block

Even if you can’t pay all the taxes you owe, you should still file your tax return by the due date. The penalty for failing to file your tax return is 10 times as much as the penalty for failing to pay.

To have a penalty removed (abated), you’ll need to call or write the IRS. You may be able to get a penalty removed simply because you haven’t had any IRS penalties charged in the last three years. This option, known as first-time abatement, is available for failure to file and failure to pay penalties.

Learn how to address IRS penalties.

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