IRS Penalties: Failure To File vs. Failure To Pay

Failure-To-File and Failure-To-Pay are two separate penalties the IRS can charge you with. The law provides that the IRS can assess a penalty on either or both instances, should they occur.

First let’s discuss what Failure-To-File means:
Failure-to-file occurs if you do not file by the tax deadline. This penalty is generally more than the failure-to-pay penalty, so if you need more TIME to file, you can file a tax extension. Our sister product ExpressExtension provides the correct forms you will need to extend the filing deadline, and avoid this penalty:

  • The Failure-To-File penalty is generally 5% of the unpaid taxes for each month or part of the month it is late, up to 25% of your unpaid tax.
  • If the return is more than 60 days late, the minimum penalty is $135 or 100% of the unpaid tax, whichever is smaller.

Now let’s get into Failure-To-Pay:
Failure-to-pay occurs if you do not pay by the due date. Filing a Tax Extension only extends the amount of time to file, NOT to pay any tax that is due.

  • Generally there is a penalty of 1/2 to 1% of your unpaid taxes for each month or part of the month after the due date that your taxes are not paid, up to 25% of unpaid taxes.
  • If you filed a Tax Extension and paid at least 90% of your tax due by the original due date, and pay the remaining balance by the extended due date, you will not incur a failure-to-pay penalty.

If both penalties apply in any month, the 5% failure-to-file penalty is reduced by the failure-to-pay penalty; unless your return is more than 60 days late. The minimum penalty will be $135 or 100% of the unpaid tax, whichever is smaller. If you can show reasonable cause for filing or paying late, the penalties may be waived. For any questions you have pertaining tax laws or tax advice make sure to contact your tax professional.

If you have any questions about filing your 1099 or W-2, or need more information on Tax Extensions, contact our Express Tax Support Center via phone: 704.839.2270 or email:

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