Get the facts about late filing and late payment penalties

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Post the following article on your websites and/or use in other communication vehicles to help

your customers get the facts about late filing and late payment penalties.

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Get the facts about late filing and late payment penalties

April 15 is the annual deadline for most people to file their federal income tax return and

pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both

failing to file a tax return and for failing to pay taxes they owe by the deadline.

Here are seven important points about penalties for filing or paying late.

1. If you timely requested an extension of time to file your individual income tax

return and paid at least 90 percent of the taxes you owe with your request, you

may not face a failure-to-pay penalty. However, you must pay any remaining

balance by the extended due date. IRS Direct Pay is the latest electronic

payment option available which allows you to schedule payments online from

your checking or savings account with no additional fee and with immediate

payment confirmation. It’s, secure, easy, and much quicker than mailing in a

check or money order.

2. You can reduce additional interest and penalties by paying as much as you can

with your tax return. You should explore other payment options such as getting a

loan or making an installment agreement to make payments. The IRS will work

with you.

For example, you can apply for an Online Payment Agreement if you owe

$50,000 or less in combined tax, penalties and interest, and filed all required

returns. You may also qualify for a short-term agreement if your balance is under

$100,000.

3. The penalty for filing late is normally five percent of the unpaid taxes for each

month or part of a month that a tax return is late. That penalty starts accruing the

day after the tax filing due date and will not exceed 25 percent of your unpaid

taxes.

4. If you do not pay your taxes by the tax deadline, you normally will face a failure-

to-pay penalty of one-half of 1 percent of your unpaid taxes. That penalty applies

for each month or part of a month after the due date and starts accruing the day

after the tax-filing due date.

5. If both the five percent failure-to-file penalty and the one-half percent failure-to-

pay penalties apply in any month, the maximum penalty that you’ll pay for both is

5 percent.

6. If you file your return more than 60 days after the due date or extended due date,

the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

7. You will not have to pay a late-filing or late-payment penalty if you show

reasonable cause for not filing or paying on time.

For more information about penalty and interest charges, refer to Part One, Chapter 1,

Filing Information, of Publication 17, Your Federal Income Tax for Individuals.

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NOTE TO EDITOR: Below are links to help taxpayers find the information about late

filing and late payment penalties.

IRS.gov

• Online Payment Agreement tool

• Make a Payment – payment options

• Tax Topic 653 - IRS Notices and Bills, Penalties and Interest Charges

• Q&A about interest and penalties for filing and paying late

IRS YouTube videos:

• Online Payment Agreement - English

• Owe Taxes But Can't Pay? - English | Spanish | ASL

IRS Podcasts:

• Online Payment Agreement - English

• IRS Tax Payment Options - English | Spanish