Failure to File Penalty IRS: 2026 Monthly Costs and Minimums
The failure to file penalty IRS is a mandatory assessment for taxpayers who miss the federal tax deadline without an extension. For the 2026 tax season, this penalty is generally 5% of the unpaid tax for each month or partial month your return is late. This monthly charge can quickly balloon, reaching a maximum cap of 25% of the total unpaid tax after five months.
In this guide, we will break down the exact 2026 calculation rules, the expensive minimums for returns over 60 days late, and how the new automatic first-time abatement starting in 2026 can help you wipe out these fees. Understanding the failure to file penalty IRS is critical because it is ten times more expensive than the late payment penalty.
How the 2026 Failure to File Penalty is Calculated
The IRS determines the failure to file penalty IRS based on your “unpaid tax”—the total tax due minus withholding, estimated payments, and refundable credits. The 5% rate applies for every month your return is overdue. For example, if you owe $2,000 and file two months late, the penalty would be $200 ($2,000 x 0.05 x 2 months).
Even if you pay your taxes in full by the deadline but forget to file the paperwork, you could still be subject to this penalty if there was a balance required to be shown on the return.
Quick Tip: The IRS counts “partial months” as full months. Filing just one day after a new monthly anniversary will trigger another full 5% charge.
Takeaway: Filing your return on time is the single most important action you can take to stop the highest IRS penalties from ever starting.
The 60-Day Minimum Penalty Rule for 2026
If your tax return is more than 60 days past the due date (including extensions), a minimum failure to file penalty IRS applies. For returns required to be filed in 2026, this minimum has increased to the lesser of $525 or 100% of the tax owed.
This means if you owe a small amount—for example, $300—and file 70 days late, you will owe the full $300 as a penalty. If you owe $1,000 and file 70 days late, you will owe $525 instead of the standard $100 (5% x 2 months).
2026 Minimum Penalty Comparison
| Return Due Date | Minimum Failure to File Penalty |
|---|---|
| After 12/31/2025 (Tax Year 2026) | $525.00 |
| 01/01/2025 to 12/31/2025 | $510.00 |
| 01/01/2024 to 12/31/2024 | $485.00 |
Takeaway: Once you cross the 60-day threshold, the penalty for filing late can easily exceed the cost of the original tax debt.
New for 2026: Automatic First-Time Abatement
A significant change starting in 2026 is that the IRS will begin automatically applying First-Time Abatement (FTA) to qualifying taxpayers. Historically, you had to call or write to the IRS to request this waiver, but the agency is now using automated systems to grant relief to those with a clean compliance history.
To qualify for the failure to file penalty IRS waiver in 2026, you must generally meet these criteria:
- Penalty History: No similar penalties for the three tax years prior to the current year.
- Filing Compliance: You must have filed all currently required returns or valid extensions.
- Payment Compliance: You have paid, or arranged a payment plan for, all taxes currently due.
If you don’t qualify for automatic relief, you can still request abatement for “Reasonable Cause,” such as a natural disaster, serious illness, or the death of an immediate family member.
Use our IRS Penalty Calculator to see if your potential waiver is worth a call to the IRS. For more details on the combined cost of filing and paying late, visit our Late Filing Penalty Guide or see the 2026 Relief Guide. For partnership information, see Form 1065 Penalties.
Takeaway: 2026 is the easiest year yet to have a penalty removed—don’t pay your failure to file notice without checking for an automatic waiver first.
Frequently Asked Questions
What happens if I also didn’t pay on time?
When both the failure to file penalty IRS and the failure to pay penalty apply in the same month, the IRS reduces the 5% filing penalty by the 0.5% payment penalty. This keeps the combined monthly charge at 5%.
Does this penalty apply if I’m getting a refund?
No. If you are due a refund, the 5% monthly failure to file penalty IRS generally does not apply. However, you must file within three years to claim that refund.
What if I filed an extension but still filed late?
The penalty only applies to the time after your extension expires. If you received an extension until October 15 but didn’t file until November, you would be charged for one month of the failure to file penalty IRS.
Will the IRS charge interest on this penalty?
Yes. Interest accrues on both your unpaid taxes and your penalties until the balance is paid in full. This interest is compounded daily.
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