Tax & compliance
Failure-to-File Penalty
Formula reviewed by Tahir Asif, CMA
A penalty of 5% of the unpaid tax for each month or part of a month a return is late, up to 25%.
If you do not file your return by the due date, including extensions, the IRS charges 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25%. In months when the failure-to-pay penalty also applies, the filing penalty is reduced to 4.5%, so the two together are 5%.
A return that is more than 60 days late has a minimum penalty: the lesser of an indexed dollar amount ($525 for returns due in 2026) or 100% of the tax. Filing on time, even if you cannot pay, avoids this penalty.
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