Failure to Pay Penalty
A penalty for paying late, charged monthly on the unpaid tax and capped at a quarter of it. The rate changes if you are on a payment plan.
Full Definition
The failure to pay penalty applies when you do not pay the tax when it is due. The IRS calculates it as 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid, and states it will not exceed 25% of the unpaid amount. Three variations matter. If you filed on time as an individual and have an approved payment plan, the penalty is reduced to 0.25% per month during the plan. If you do not pay within 10 days of getting a notice of intent to levy, it rises to 1% per month or partial month. And 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 amount for that month. The IRS applies full monthly charges even if you pay in full before the month ends, and states the penalty may be removed or reduced where you acted in good faith and can show reasonable cause.
What to do next
Pay what you can now and apply for a payment plan for the rest. The IRS states that where a taxpayer filed on time as an individual and it approves a plan, the rate drops to 0.25% per month while that plan runs — both conditions are the IRS's to assess, not yours.
Sources
- Failure to pay 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.