Minds → Tax → What are the late-filing and late-payment penalties, and how does first-time penalty abatement work? Cite only eCFR (www.ecfr.gov) or U.S. Code sources, never irs.gov. Answer in under 100 words.

US FederalTax Year 2026

What are the late-filing and late-payment penalties, and how does first-time penalty abatement work? Cite only eCFR (www.ecfr.gov) or U.S. Code sources, never irs.gov. Answer in under 100 words.

For tax year 2026, the late-filing penalty under § 6651(a)(1) is 5% per month up to 25% of the net amount due, and the late-payment penalty under § 6651(a)(2) is 0.5% per month up to 25%. First-time penalty abatement is not described in the provided eCFR or U.S. Code sources.

Last verified: 2026-08-26 · Sources checked: 1/1 resolving · Next scheduled review: 2026-11-24

Details / How it works

Under 26 CFR 301.6651-1, the failure-to-file penalty applies when a return required under Subchapter A of Chapter 61, 51, 52, or 53 of the Code is not filed by the prescribed date, unless reasonable cause is shown. The failure-to-pay penalty applies when tax shown on a return (filed after December 31, 1969) is not paid on time, or when tax not shown on a return is not paid within 21 calendar days (10 business days if $100,000 or more) of a notice and demand, again subject to reasonable cause.

Numbers & thresholds

Penalty Type	Rate per Month	Aggregate Maximum
Failure to file (§ 6651(a)(1))	5%	25% of net amount due
Failure to pay (§ 6651(a)(2))	0.5%	25% of tax shown
Failure to pay after notice and demand (§ 6651(a)(3))	0.5%	25% of amount demanded

Note: The failure-to-file penalty is reduced by the failure-to-pay penalty for any month both apply. For individuals with an installment agreement, the failure-to-pay rate is reduced to 0.25% per month.

Exceptions & edge cases

Both penalties may be avoided if the taxpayer shows reasonable cause (e.g., ordinary business care and prudence). For failure to file, a minimum penalty of the lesser of $535 or 100% of the tax required to be shown applies for returns filed more than 60 days after the due date (2027). A return prepared by the Secretary under § 6020(b) is not treated as filed for the failure-to-file penalty but is treated as filed for failure-to-pay purposes.

Sources

[1]U.S. National Archives, Electronic Code of Federal Regulations — 26 CFR 301.6651-1 — Failure to file tax return or to pay tax · as of 2026-08-26

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