What Are the IRS Penalties for Not Filing a Tax Return or Not Paying?

If you owe taxes and you do not file a tax return on time, you will incur penalties. However, if you are expecting a refund, you will not face any penalties for filing late. 

If you do not pay the taxes you owe by the tax deadline, even if you got an extension of time to file, you will incur different penalties. If you have unpaid taxes, you will owe the IRS interest in addition to any penalties. Interest rates are determined quarterly, and interest is generally compounded daily until full payment is made.

Remember that the penalties for not efiling/filing either a tax return or a tax extension are higher than not paying taxes owed. So it's better to efile and pay as much taxes as you can afford, than not efiling at all.

Late Filing and Late Payment - Common Myths and Misconceptions

efile tax return late tax payment penalty

List Item 1 Tax Extensions & Tax Payments

Myth: Efiling or filing a tax extension postpones my tax payments and avoids any IRS penalties.

Truth: Even if you get an extension, you still have to pay at least 90% of your balance due to avoid a late tax payment penalty.

List Item 2 More Expensive to Not Pay on Time vs. Not File A Return/Extension on Time?

Myth: The penalty for not filing a tax return or an extension by Tax Day is small. Not paying is more expensive.

Truth: Not efiling or filing a tax return or an extension is ten times more expensive than not paying your taxes on time! (5% vs. 0.5%)

List Item 3 Filing a Tax Return Three Years After Original Tax Return Due Date

Myth: If it has been three years since the tax return due date, you don't have to file a tax return for that year anymore.

Truth: After three years, you can no longer claim a tax refund for that year (but you may still file a tax return). However, if you owe taxes, you'll need to file your return as soon as possible as well as owe back taxes and penalties.

Can I Still File My Tax Return and Claim My Refund/Pay Taxes Owed?

Review the chart below for information on when and how to claim your tax refund or pay taxes owed:

Tax Year Tax Return Deadline Claim Refund/File Return By Instructions for
Claiming Refund

Instructions for
Taxes Owed

2015 April 15, 2016 April 15, 2019 Efile starts in January 2016.






File your tax return as soon as possible to reduce late filing fees and penalties.




 

 

2014 April 15, 2015 April 15, 2018 Efile starts in January 2015.
2013 April 15, 2014 April 15, 2017 Efile your 2013 tax return now!
2012 April 15, 2013 April 15, 2016

Efile no longer available.

Prepare, file your 2012 tax return on paper.

2011 April 17, 2012 April 17, 2015

Efile no longer available.

Prepare, file your 2011 tax return on paper.

2010 April 18, 2011 Expired

You can no longer claim a 2010 tax refund. 

Prepare, file your 2010 tax return on paper.

2009 April 15, 2010 Expired

You can no longer claim a 2009 tax refund.

Prepare, file your 2009 tax return on paper.

No Matter What: Still File on Time (if Possible) and Pay as Much as You Can

Even if you cannot pay the full amount of your tax debt on time, you should file your tax return or tax extension on time in order to avoid greater penalties.

What Is the Penalty for Filing Late?

If you file your tax return after the deadline, and you did not get an extension, then you will be assessed a penalty of 5% of your balance due per month. The failure-to-file penalty amount will be reduced by the amount you owe for failure-to-pay. The maximum amount you will owe for filing late will be 25% of your unpaid taxes. If you file more than 60 days late, your minimum failure-to-file penalty will be 100% of your unpaid taxes or $135 (whichever is smaller).

What Is the Penalty for Paying Late?

If you do not pay the full amount you owe by the tax deadline, even if you file an extension, you will be assessed a penalty of 0.5% of your balance due per month. The amount of your failure-to-pay penalty will not exceed 25% of your back taxes.

If you do not pay your full balance due, you will also owe interest on the unpaid amount.The interest rate is set quarterly by the federal government. The current 2013 interest rate for underpayment of taxes is 3%.

Will I Owe Penalties for Late Filing and Late Payments?

In general, if you owe taxes and you file late and/or pay late, you will owe penalties and interest.

To find out if you may face IRS penalties for late filing and/or late payment, find the scenario below that applies to you:

1. I did NOT efile or file a federal tax return for Tax Year 2013 by April 15, 2014, but I expect a refund.

You will not face penalties, but you must file a return to claim your refund. You will have 3 years from April 15, 2014 to file a 2013 Tax Return and claim your tax refund. After April 15, 2017, you can no longer claim your 2013 refund and the money goes to the government. Information about unclaimed tax refunds.

What Next? Prepare and efile a tax return through efile.com as soon as possible and no later than October 15, 2014. After October 15, 2014, you can work with an efile.com tax professional to prepare and file your 2013 Tax Return.

2. I DID efile or file a federal tax return on time, and I owe unpaid taxes.

You will probably have to pay the failure-to-pay penalty, which is 0.5% of your balance due for each month (or part of a month) in which your taxes go unpaid. The maximum amount of this penalty is 25% of your unpaid taxes.

What Next? Pay some or all of your taxes as soon as possible. If you cannot pay the full amount at one time, you may be able to enter into an installment agreement with the IRS.

3. I did NOT efile or file a federal tax return or an extension on time, and I owe unpaid taxes.

You will probably face two types of penalties: one for not filing or efiling a tax return or extension on time, and one for not paying your taxes on time.

The failure-to-file penalty is 5% of your balance due for every month (or part of a month) in which your taxes go unpaid. The amount you owe for this penalty will be reduced by the amount you owe for the failure-to-pay penalty. The maximum amount of this penalty is 25% of your unpaid taxes. If you file your tax return more than 60 days late, the minimum failure-to-file penalty will be 100% of your unpaid taxes or $135, whichever is smaller.

The failure-to-pay penalty is 0.5% of your balance due for each month (or part of a month) in which your taxes remain unpaid. This penalty will not be more than 25% of your unpaid taxes.

What Next? Prepare and efile a tax return through efile.com as soon as possible and no later than October 15, 2014. After October 15, 2014 you can work with an efile.com tax professional to prepare and file your 2013 Tax Return. Also, pay some or all of your taxes as soon as possible. If you cannot pay the full amount now, you may be able to enter into a payment arrangement with the IRS. Other tax payment options.

4. I DID efile or file an IRS accepted extension on time, and I expect a tax refund or owe $0 in taxes.

efile tax return late tax filing penalty

You have until October 15, 2014 to efile a 2013 Tax Return. You will not owe any penalties, but you must file a tax return within 3 years of the original deadline in order to claim a tax refund (by April 15, 2017, for 2013 Tax Returns). If you file a return, and later realize you made an error on the return, the deadline for claiming any refund due is 3 years after the return was filed or 2 years after the tax was paid, whichever expires later.

What Next? Prepare and efile a 2013 Tax Return through efile.com by October 15, 2014. You have until April 15, 2017 to paper file a 2013 Tax Return and still claim any refund you are owed.

5. I DID efile or file an IRS accepted extension on time, and I owe taxes, but I have not paid them.

If you pay at least 90% of your balance due when you get your federal extension, you will not be penalized for late payment. Otherwise, you will probably have to pay a failure-to-pay penalty of 0.5% of your balance due for each month (or part of a month) in which your taxes go unpaid. The maximum for this penalty is 25% of your unpaid taxes.

You must efile or file your 2013 Tax Return by the extended deadline of October 15, 2014, or you will begin to face the failure-to-file penalty, which is 5% of your balance due for every month (or part of a month) in which your taxes go unpaid. The amount you owe for this penalty will be reduced by the amount you owe for the failure-to-pay penalty, if you owe both of them in any month. The amount of the failure-to-file penalty will not exceed 25% of your balance due, but If you file your tax return more than 60 days after the extended deadline, the minimum failure-to-file penalty will be 100% of your unpaid taxes or $135, whichever is smaller.

What Next? Prepare and efile a 2013 Tax Return on efile.com by October 15, 2014. Also, pay as much as you can as soon as possible. If you cannot pay the full balance now, you may be able to enter into an IRS installment tax payment plan.

6. I DID efile or file a tax return or tax extension, but it was rejected and I did NOT file again, AND I owe unpaid taxes.

This situation is the same as having filed no tax return at all, and you will likely face failure-to-file penalties and failure-to-pay penalties. Please see #3, above.

As you can see, not filing a tax return on time is more expensive than not paying taxes!

7. I have a reasonable cause for not filing my tax return or paying my taxes owed on time. 

You will not have to pay a failure-to-file or a failure-to-pay penality

What If I Can't Pay the Taxes or Penalties I Owe?

If you can't pay at least 90% of the taxes you owe by the original tax deadline, you will probably owe penalties. How can you pay your tax bill when the balance due keeps adding up?

Solution 1: Find Alternate Methods to Pay

For example, if you use a credit card or a loan to pay your tax bill, the interest may be less than the IRS penalties you would face. Options to pay the taxes you owe now.

Solution 2: Make a Payment Agreement with the IRS

There are three options to arrange a payment plan with the IRS:

  1. get a short-term extension of time to pay,
  2. enter into an installment plan, OR
  3. make an offer-in-compromise.

More information about installment plans and other IRS payment options

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