Penalty for Not Filing Taxes: 2026 IRS Rules, Costs, and Relief
The penalty for not filing taxes is a monthly charge added to your tax bill when you fail to submit your federal tax return by the official deadline. For 2026, this penalty is generally 5% of the unpaid taxes for each month or partial month your return is late, reaching a maximum of 25%. If your return is more than 60 days late, the minimum penalty increases to $525 or 100% of the tax owed, whichever is smaller.
In this guide, we will break down how the penalty for not filing taxes is calculated, why it is so much more expensive than the penalty for paying late, and the specific steps you can take to get these fees waived if you missed the deadline due to an emergency. Understanding these rules can help you avoid thousands of dollars in unnecessary debt.
What is the Penalty for Not Filing Taxes?
The IRS takes filing deadlines very seriously. While many people worry about the “late payment” fee, the penalty for not filing taxes (often called the “Failure to File” penalty) is actually ten times higher. The government wants your paperwork on time so they can track what is owed, even if you can’t pay the full balance right away.
This penalty applies if you owe taxes and do not file your return by the April 15 deadline (or October 15 if you requested an extension). If you are due a refund, the IRS generally does not charge a penalty for filing late, but you risk losing that refund forever if you wait more than three years to file.
Quick Tip: Always file your return on time, even if you have $0 in your bank account. Filing stops the 5% monthly penalty for not filing taxes from starting in the first place.
Takeaway: The failure to file penalty is designed to be expensive to encourage everyone to submit their paperwork on time.
How the 2026 Filing Penalty is Calculated
The IRS calculates the penalty for not filing taxes based on how many months have passed since the due date and the amount of tax you haven’t paid. For 2026, inflation adjustments have slightly increased the minimum costs for late filers.
- The Monthly Rate: 5% of the unpaid tax for each month or part of a month the return is late.
- The 25% Cap: The monthly penalty stops growing after five months (5% x 5 months = 25%).
- The 60-Day Rule: If you are more than 60 days late, the IRS enforces a minimum penalty of $525 (for returns due in 2026) or 100% of the tax owed, whichever is less.
2026 Penalty Summary Table
| Timeframe | Penalty Rate | Minimum (if $ owed) |
|---|---|---|
| 1–30 Days Late | 5% of unpaid tax | No minimum |
| 31–60 Days Late | 10% of unpaid tax | No minimum |
| Over 60 Days Late | 15% or more | $525 (or 100% of tax) |
| 5+ Months Late | 25% (Maximum) | $525 (or 100% of tax) |
Real-World Example: If “Mark” owes $1,000 and files his return 65 days late, his penalty for not filing taxes isn’t just 15% ($150). Because he passed the 60-day mark, his penalty jumps to $525. He now owes the IRS over 50% more than his original tax bill just for being two months late!
Takeaway: Once you pass the 60-day mark, the penalty becomes much more aggressive, especially for small tax balances.
Why Filing Late Costs More Than Paying Late
It sounds strange, but the penalty for not filing taxes is much worse than the penalty for not paying. The late payment penalty is only 0.5% per month, while the late filing penalty is 5% per month. The IRS would much rather have your information than your money (at least initially).
If you find yourself in a position where you can’t afford your taxes, the best strategy is to file your return on time and then contact the IRS about a payment plan. This keeps your penalty at the lower 0.5% rate rather than the 5% rate.
Quick Tip: If you file on time and set up an installment agreement, the IRS may even reduce your late payment penalty to 0.25% per month!
Takeaway: Filing your paperwork is the single best way to protect yourself from the most expensive IRS penalties.
How to Get a Filing Penalty Removed (Abatement)
If you have been hit with a penalty for not filing taxes, you might be able to get it removed through “Penalty Abatement.” This is a process where the IRS “forgives” the penalty if you meet certain criteria. There are two main ways to qualify:
- First-Time Abate (FTA): If you have a clean record for the past three years and have filed all current returns, you can ask the IRS for a one-time “forgiveness” of your filing penalty.
- Reasonable Cause: If a major life event—like a natural disaster, a house fire, a serious illness, or the death of an immediate family member—prevented you from filing, you can submit evidence to have the penalty waived.
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Takeaway: Don’t assume you have to pay; if you have a good history or a valid excuse, the IRS is often willing to work with you.
Frequently Asked Questions
What if I missed the deadline but don’t owe any money?
If you are expecting a refund or owe $0, there is typically no penalty for not filing taxes. The penalty is a percentage of the unpaid tax. However, if you wait more than three years to file, you lose the right to claim your refund entirely.
Can the IRS file a return for me if I don’t?
Yes. This is called a “Substitute for Return” (SFR). The IRS will use information from your employers (W-2s and 1099s) to create a return for you. However, they usually won’t include any of the deductions or credits you might be entitled to, which means the tax (and the penalty for not filing taxes) will be much higher than if you filed yourself.
What documentation do I need for a “Reasonable Cause” waiver?
The IRS wants proof. If you were sick, get a letter from your doctor. If there was a natural disaster, keep news clippings or insurance claims. The more evidence you provide showing that you were physically or mentally unable to file, the better your chances are of having the penalty removed.
Does an extension stop the penalty for not filing taxes?
Yes, but only until the extension deadline (usually October 15). If you miss the October 15 deadline after filing an extension, the penalty for not filing taxes starts immediately and is calculated back to the original April deadline.