How Long Can The IRS Penalize You?
The Internal Revenue Service (IRS) can penalize taxpayers for not filing their taxes or paying them in a timely manner. The Failure to File Penalty is 5% of the unpaid tax for each month (or partial month) the tax return is late and will increase up to 25% of the owed amount if it goes beyond 5 months. Meanwhile, the Failure to Pay Penalty is 0.5% of the unpaid tax per month on any balance owing, but this penalty also maxes out at 25%. Therefore, even after 5 months of non-payment, that maximum penalty can still be applied until such time as the full payment has been made.