What Is the failure to File penalty?

The failure-to-file penalty results when you do not file your tax return by the deadline.

The penalty usually amounts to 5% of your unpaid tax liability for every month, or part of a month, that the return is late, though it will not exceed 25% of your total unpaid tax liability.

The IRS can also impose a failure-to-pay penalty, though generally the failure-to-file penalty is the harsher of the two.

Therefore, you should still make an effort to file your taxes on time, even if you cannot pay them. The IRS offers a variety of payment plans for those who cannot afford to pay the full amount.

Note that if you cannot file by the normal April deadline, you can request an extension, which will give you an additional 6 months, penalty free, to file your return.