Failure to pay penalty: the monthly charge on tax left unpaid
Enter the unpaid tax and the number of months it stays unpaid, then pick the rate that applies: the standard rate, the reduced rate under a payment plan, or the higher rate after a final notice of intent to levy.
- Standard rate
- 0.5 % a month
- In an approved plan, return on time
- 0.25 % a month
- After a notice of intent to levy
- 1 % a month
- Ceiling
- 25 %
Failure to pay penalty
$990
0.50 % of the unpaid tax per month or part of a month; the 25 % ceiling is reached after 50 months at this rate.
| Months counted | 18 |
| Share of the tax | 9 % |
| Ceiling (25 % of the tax) | $2,750 |
The penalty is figured on the tax still unpaid at the start of each month; partial payments lower it. Interest is extra.
Compiled by Radif Partners · How we calculate · rules and rates read on irs.gov · not tax advice, the IRS decides
The failure to pay penalty is 0.5 % of the tax still unpaid for each month or part of a month after the due date, and it never exceeds 25 % of that tax. Three things change the monthly rate. An individual who filed on time and has an approved payment plan pays 0.25 % a month while the plan runs. Anyone who has not paid 10 days after a notice of intent to levy pays 1 % a month from then on. And each payment shrinks the base, because the penalty is figured on the tax left unpaid, not on the original amount. At the standard rate the ceiling arrives after 50 months; in a plan it takes 100. On $11,000 of tax left unpaid for 18 months, the penalty is $990 at the standard rate and $495 under a plan. Interest is charged separately, on top.
What the base of the penalty is
The IRS failure to pay penalty page defines unpaid tax as the tax required to be shown on the return minus withholding, estimated payments and refundable credits. Penalties and interest already on the account are not part of the base. That is why a payment applied to the tax first lowers next month's penalty, while a payment applied to interest would not.
The IRS charges a full month even when the tax is paid partway through it. Paying on the third day of a new month still costs that whole month at the rate in force. The table below holds the tax at $11,000 and runs the three rates side by side.
| Months unpaid | Standard (0.5 %) | In a plan (0.25 %) | After levy notice (1 %) |
|---|---|---|---|
| 1 | $55 | $28 | $110 |
| 6 | $330 | $165 | $660 |
| 12 | $660 | $330 | $1,320 |
| 18 | $990 | $495 | $1,980 |
| 30 | $1,650 | $825 | $2,750 |
| 50 | $2,750 | $1,375 | $2,750 |
Your unpaid tax and the months
Failure to pay penalty
$176
| Months counted | 9 |
| Share of the tax | 4.5 % |
| Ceiling (25 % of the tax) | $975 |
Two due dates, depending on how the tax arose
For tax shown on a return, the penalty runs from the return due date, April 15 for most individuals, and an extension to file does not move it. For tax the IRS adds later, after an audit or a matching notice, the penalty starts only if the amount is not paid by the date on the notice. That date is generally 21 calendar days after the notice, or 10 business days when the amount is $100,000 or more. Paying an added amount by the notice date avoids this penalty on it altogether; interest from the original due date still applies.
Paying part of the tax early
Every dollar of tax paid stops its share of the penalty from the next month. Suppose $11,000 stays unpaid for 4 months, then $6,500 is paid and the remaining $4,500 stays open another 14 months. The penalty over those 18 months is $535, against $990 if nothing had been paid until the end. A partial payment made before the IRS sends any notice works the same way; it does not need a plan or a phone call.
When the rate halves and when it doubles
The reduced 0.25 % rate is limited to individuals whose return was filed on time, including extensions, and only for months in which an approved installment agreement is in force. A person who filed late and then set up a long-term plan keeps the 0.5 % rate. The installment agreement page compares the plan types.
The higher 1 % rate starts 10 days after the IRS issues a notice of intent to levy, such as a CP504 or a final notice under section 6331(d), and applies to tax still unpaid from then on. It is the most expensive stage of the debt, and the same 25 % ceiling still caps it, reached after 25 months at that rate.
Reading the penalty on a balance due notice
The first bill after a return is processed, usually a CP14, shows the late payment penalty charged up to the notice date and gives a date to pay. Each later notice adds the months that have passed since. Because the penalty is counted in whole months from the due date, two notices a few weeks apart can show the same penalty, then jump. The IRS page on the penalty also gives the plainest way to stop it: send a payment or pay the tax in full, and the months that follow are no longer charged on the part that was paid. When a notice seems wrong, the route is the same as for any penalty: call the number on it or write to the address it gives, with the notice and an explanation.
The ceiling, and why interest does not stop with it
Once the penalty reaches 25 % of the tax, it stops. On $11,000 that is $2,750, however long the balance stays open. Interest keeps running on the tax and on the penalty itself at the quarterly rate, 7 % in the fourth quarter of 2026, compounded daily. The penalty and interest calculator adds the two.
The penalty can be removed for reasonable cause or through first-time abatement, and for 2025 returns onward it is not assessed when the Automatic Exemption from Penalty applies. Lack of money alone is not reasonable cause, according to the IRS, though other facts showing ordinary care may be. The IRS rules on each request.