I can't pay — should I still file?

Yes, always. Filing on time swaps the 5% monthly penalty for the 0.5% one — the single cheapest move in the Code.

What is the 60-day minimum?

Past 60 days late, the smaller of $525 (for 2026 returns) or 100% of the tax due. Early filing avoids it entirely.

Can these penalties be removed?

Often — First-Time Abatement for clean records, reasonable cause with proof otherwise. Both must be requested.

IRC §6651 · 26 U.S.C. §6651

IRC §6651: Failure to File or Pay

By Paul D. Diaz, EA, MBA · Updated September 20, 2026

IRC §6651 imposes the failure-to-file penalty at 5% of unpaid tax per month (to 25%) and the failure-to-pay penalty at 0.5% monthly — plus a minimum penalty past 60 days late. Filing on time even when broke drops you from the 5% track to the 0.5% track.

What it governs

Failure-to-file: 5% per month to 25%, on the unpaid tax
Failure-to-pay: 0.5% monthly — 0.25% while an installment agreement runs
60-day minimum: the smaller of $525 (2026 returns) or the full tax due
Reasonable-cause relief available for both

In the GuideFull treatment in Chapter 6 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).

From the practiceAbatement in 4 steps →

Questions this section answers

I can't pay — should I still file?: Yes, always. Filing on time swaps the 5% monthly penalty for the 0.5% one — the single cheapest move in the Code.
What is the 60-day minimum?: Past 60 days late, the smaller of $525 (for 2026 returns) or 100% of the tax due. Early filing avoids it entirely.
Can these penalties be removed?: Often — First-Time Abatement for clean records, reasonable cause with proof otherwise. Both must be requested.

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