Failure to file: Internal Revenue Code §6651(a)(1)
- 5% of unpaid tax required to be reported
- Reduced by the “failure to pay” penalty amount for any month where both penalties apply
- Charged each month or part of a month the return is late, up to 5 months
- Applies for a full month, even if the return is filed less than 30 days late
- Income tax returns are subject to a minimum late filing penalty when filed more than 60 days after the return due date, including extensions. The minimum penalty is the LESSER of two amounts – 100% of the tax required to be shown on the return that you didn’t pay on time, or a specific dollar amount that is adjusted annually for inflation. The specific dollar amounts are:
- $215 for returns due on or after 1/1/2020
- $210 for returns due between 1/1/2018 and 12/31/2019
- $205 for returns due between 1/1/2016 and 12/31/2017
- $135 for returns due between 1/1/2009 and 12/31/2015
- $100 for returns due before 1/1/2009
Failure to pay tax reported on return: Internal Revenue Code §6651(a)(2)
- 0.5% of tax not paid by due date, April 15; 0.25% during approved installment agreement (if return was filed on time, and taxpayer is an individual); 1% if tax is not paid within 10 days of a notice of intent to levy
- Recurring charge on the remaining unpaid tax each month or part of a month following the due date, until the tax is fully paid or until 25% is reached
- Full monthly charge applies, even if the tax is paid before the month ends.
Failure to pay tax not reported on original return and not paid in full within 21 days of the date of notice and demand; 10 business days if the amount in the notice and demand equals or exceeds $100,000: Internal Revenue Code §6651(a)(3)
- 0.5% of tax not paid by due date in notice - generally 21 calendar days from notice date, 10 business days if the balance equals or exceeds $100,000; 0.25% during approved installment agreement (if return was filed on time, and taxpayer is an individual); 1% if tax is not paid within 10 days of a notice of intent to levy
- Recurring charge on the remaining unpaid tax each month or part of a month following the due date, until the tax is fully paid
- Full monthly charge applies, even if the tax is paid before the month ends.
Failure to pay proper estimated tax: Internal Revenue Code §6654
- Estimated tax payments are generally required, if you expect to owe at least $1,000 in tax after subtracting withholding and refundable credits.
- Generally calculated on Form 2210
- See Publication 505 for more information.
- See IRS News Release IR-2019-55
- Dishonored check or other form of payment: Internal Revenue Code §6657
- For payments of $1,250 or more, the penalty is 2% of the amount of the payment.
- For payments less than $1,250, the penalty is the amount of the payment or $25, whichever is less.
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