Tax Penalties

Penalty Type	Amount / Rate	Max / Notes
Failure to File Return	5% of unpaid tax per month	Max 25%; Minimum $510 if >60 days late
Failure to Pay Tax	0.5% per month (1% if after levy)	Max 25%; 0.25% if in installment agreement
Combined Failure to File & Pay	Up to 5% per month (4.5% file + 0.5% pay)	Max ~47.5%
Interest on Unpaid Tax	~7% annually (compounded daily)	Based on federal short-term rate + 3%
Underpayment of Estimated Tax	Interest-based penalty	Avoid if 90% of current year tax or 100–110% of last year’s paid
Information Returns (W-2/1099)	$60–$340 per form	Intentional disregard: $680+ per form, no cap
Accuracy-Related Penalty	20% of tax underpayment	40% for gross misstatements
Civil Fraud Penalty	75% of tax underpayment	Requires IRS proof of fraud
Frivolous Return Penalty	$5,000	For knowingly false or invalid filings
Payroll Tax Deposit Late	2–15% of unpaid taxes	Increases with lateness stages
Trust Fund Recovery Penalty (TFRP)	100% of unpaid trust fund taxes	Personally liable
Fail to Furnish W-2/1099 to Payee	$310 per form	Separate from filing penalty
Fail to File 1065 / 1120S	$245 per owner per month (up to 12 months)	Up to $11,760+ for 4-person firm
Excess IRA/HSA Contributions	6% of excess amount	Annual until corrected
Early Retirement Withdrawal	10% of withdrawal	Before age 59½; exceptions apply
Fail to File FBAR (Foreign Bank Account)	$10,000 (non-willful); up to $100K+ or 50% of account (willful)	Criminal charges possible
Fail to File Form 8938 (FATCA)	$10,000 initial; $50,000 for continued failure	Additional tax penalties may apply
ACA Shared Responsibility (Employers)	$241.67–$362.50 per employee per month	IRC §4980H(a/b); ~ $2,900–$4,350/year
Excess Advance Premium Tax Credit	Repayment required	Based on income discrepancy
BOI Reporting Penalty (FinCEN 2025)	$591 per day; up to $10,000 + jail (2 years)	New in 2024/25; applies to business owners
Nonprofit Late Form 990 Filing	$20–$110 per day	Up to $56,000; 3-year lapse = auto revocation
Expatriation Tax	Tax on deemed sale of worldwide assets	Applies to covered expatriates
Tax Evasion (Criminal)	Up to $250,000 fine + 5 years prison	Requires willful intent
Willful Failure to File or Pay	Up to $100,000 fine + 1 year prison	Criminal offense
Aiding/Assisting Fraud	Up to 3–5 years in prison + fines	For preparers or others involved in fraud