Filing Late

• The IRS will charge you a 4.5 percent penalty for each month that you do not file a tax return after the due date. The IRS calculates the penalty as a percentage of the tax you owe. The penalty maximum is 22.5 percent, or five months. You can avoid this penalty by filing an automatic six-month extension to file even if you have a tax balance due to the IRS and choose not to pay it by the original filing deadline.
  
  

Paying Late

• If you have an unpaid tax balance and do not provide the IRS with full payment by the original filing deadline, you must pay a half-percent penalty for each month you do not pay the balance. The maximum penalty for paying late is 2.5 percent, or five months. However, this penalty accrues concurrently with the penalty for not filing a tax return by the deadline. Submitting an automatic extension only relieves you of the obligation to file the tax return; the obligation to pay the tax in full by April 15 is not flexible.
  
  

Fraud

• If the reason you do not file a tax return by the deadline is to defraud the IRS, the penalty for filing a late return increases to 15 percent per month, rather than 4.5 percent. This penalty also accrues for a maximum of five months, or 75 percent of the correct amount of tax you owe. You will not incur a fraud penalty if the reason you do not file is due to a mistaken belief regarding the return's due date. However, not filing the return with the intention of evading tax that you are legally responsible for is fraudulent.
  
  

Partnerships

• A partnership must file an informational tax return by the filing deadline even though individual partners are responsible for all tax liabilities of the business. The IRS will charge the partnership $195 per partner for each month the return is late. The penalties can accrue for a maximum of 12 months, or $2,340 per partner.
  
  

Interest

• The federal government will charge you monthly interest on all amounts you owe to the IRS until you make full payment. The IRS has the authority to charge interest indefinitely and is not subject to any maximum interest limitations. Additionally, interest will accrue concurrently with penalties. Interest charges can also accrue on the actual penalties that remain outstanding. The federal government uses an interest rate equal to the variable federal short-term rate plus three percentage points.