What Happens If You Don’t File and/or Pay Taxes?

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Any bookkeeping, business or tax article contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor can it be used to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.

If you don’t want any problem in the future and you want to avoid financial consequences, then you should be aware of all the tax deadlines that is relevant for you and your business to avoid filing or paying late penalties and interest.

There are a number of distinctions between the penalties of failure to file and failure to pay.  Both has a number of penalties, but failing to file will definitely cost more problems than failing to pay. This emphasizes the fact that, while both are important to accomplish on time, filing your taxes should never be delayed. In case you are sure that you need extra time for filing, you can request for an extension to file. However, you cannot request for an extension to pay, so make sure you have enough finances before the deadline.

Below is an overview of the penalties you can get if you fail to file or fail to pay on time:


  • Failure to File Penalty

            If there is failure to file your tax return on time, the IRS will penalize you for late filing fee. For this year the fee is 5% of the taxes owe for each past month up to a maximum of 25% of the taxes you owe.

However, if your return was not filed for over 60 days, there’s a minimum penalty for late filing; it is the lesser of $210 (for tax returns required to be file in 2019) or 100% of the tax owed.  Source: https://www.irs.gov/taxtopics/tc653


  • Failure to Pay Penalty

If you file a return but you don’t pay all the tax owed on time, you’ll generally have to pay a late payment penalty. For each month past the payment date you will be assessed 0.5% of your total tax bill as a penalty up to a maximum of 25% of the taxes you owe.

However, interest accrues on any unpaid tax from the day of due date until the date of payment in full. The interest rate charged is the Federal short-term interest rate that set every quarter plus the 3%. Meaning, if you the short-term rate goes up before you pay in full, your interest rate goes up, too.


  • Continuous Negligence of Tax Filing

If you think you have enough finances to cover up all the late filing and paying penalties, you are still not out of trouble. More penalties will come your way in different forms if you continually ignore your responsibility of filing and paying your taxes.

Your penalty fees will definitely increase by time and the IRS could:

The best thing you can do to avoid the penalties above is make sure you file and pay your taxes on time.

If you need an Enrolled agent to assist you with your taxes, contact us today at admin@fas-accountingsolutions.com or 832-437-0385.

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