What is the Failure to File Penalty?

The IRS will send you a notice or letter if you owe the Failure to File penalty.

How We Calculate the Penalty

They calculate the Failure to File penalty based on how late you file your tax return and the amount of unpaid tax as of the original payment due date (not the extension due date). Unpaid tax is the total tax required to be shown on your return minus amounts paid through withholding, estimated tax payments, and allowed refundable credits.

They calculate the Failure to File penalty in this way:

The Failure to File penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won't exceed 25% of your unpaid taxes.

If both a Failure to File and a Failure to Pay penalty are applied in the same month, the Failure to File penalty is reduced by the amount of the Failure to Pay penalty for that month, for a combined penalty of 5% for each month or part of a month that your return was late.

If after 5 months you still haven't paid, the Failure to File penalty will max out, but the Failure to Pay penalty continues until the tax is paid, up to its maximum of 25% of the unpaid tax as of the due date.

If the return is more than 60 days late, Failure to File penalty is the could be or 100% of the underpayment

Did you forget to file for prior years?

Give us a call 800-527-8020

or receive a call back at www.chimeinconsults.com

***We may be able to reduce or remove some of your

penalties.