What is the failure-to-pay penalty

You will be charged a failure-to-pay penalty by the IRS if you do not pay the tax you owe by the April due date and fail to file for an extension of your time to file.

If you file an extension by the April deadline and pay at least 90 percent of the tax you owe at that point, the IRS will waive the penalty provided the remainder of your tax liability is fully paid by the end of the extension period.

The failure-to-pay penalty is 1/2 of 1 percent of your unpaid taxes per month until your tax is paid. So,if you owe $1000 in tax your penalty is $5 per month. if you pay part of the taxes owed, the failure-to-pay penalty is prorated according to the amount remaining unpaid.

The failure-to-pay penalty is typically less costly than the failure-to-file penalty but can balloon to as much as 25 percent of your unpaid tax.

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