Penalties and interest
What the IRS charges when you file late, pay late, or both. The rates, the minimums, the caps, and how to ask for relief.
Three charges cover almost every late return: a penalty for filing late, a penalty for paying late, and interest on both. The first is ten times the second. Interest cannot be waived. The penalties usually can, once, if you ask correctly.
Penalty calculator
Estimate failure-to-file and failure-to-pay penalties plus interest for a late federal return. Shows the extension math side by side.
Failure-to-file penalty
Five percent of unpaid tax per month, capped at 25 percent, with a minimum penalty after 60 days. How it is computed and how to stop it.
Failure-to-pay penalty
Half a percent per month on the unpaid balance, up to 25 percent. How it interacts with the failure-to-file penalty and a payment plan.
First-time abatement
The IRS waives failure-to-file, failure-to-pay, and deposit penalties once for taxpayers with a clean three-year history. The exact conditions and how to ask.
IRS interest rates
Interest is set quarterly and compounds daily. The current rate, how it is set, and why it cannot be abated.
Partnership and S corp late filing penalty
A per-owner, per-month penalty that applies even when the entity owes no tax. How it is calculated and the relief available to small partnerships.
Reasonable cause
When first-time abatement does not apply, reasonable cause is the other path. What the IRS accepts, what it does not, and how to write the statement.