Failure to File Penalty
A penalty for filing late, charged monthly against the tax due and capped at a quarter of it.
Full Definition
The failure to file penalty applies if you do not file your return by the due date, including extensions. For individuals and most business returns the IRS calculates it as 5% of the tax due — less any tax paid on time and available refundable credits — for each month or partial month the return is late, accruing to a maximum of 25%. If a return is more than 60 days late, a minimum penalty applies: the IRS publishes a table of minimum amounts by return due date, or 100% of the underpayment, whichever is less. Where both the failure to file and failure to pay penalties apply in the same month, the failure to file penalty is reduced by the failure to pay penalty for that month. After five months the failure to file penalty maxes out, while the failure to pay penalty continues. The IRS states the penalty does not apply if you can show the failure was due to reasonable cause. This is why the IRS advises filing on time even when you cannot pay: the two penalties are separate and the filing one is by far the larger.
What to do next
File the return even if you cannot pay. The IRS charges the filing penalty at a far higher monthly rate than the payment penalty, so filing on time is the larger of the two savings.
Sources
- Failure to file penalty — Internal Revenue Service, retrieved 2026-08-20
Last reviewed 2026-08-20 by Tax Resolution Clarity editorial.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice.
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Where to go next
The IRS publishes the rules this page describes. Your own notice governs your dates.