If the tax is not paid by the due date of the return, interest is charged at the rate in effect from that period to the date of payment in full.
Interest is compounded daily and adjusted quarterly.
Section 6601 of the Internal Revenue Code provides for interest on underpayment, nonpayment, or extensions of time for payment, of tax. Penalties For individual income tax returns, the return is to be filed on the due date. If the return is not filed, and tax is owed and not paid by the due date of the return, failure to file penalty is charged. The penalty amount is 5 percent of the outstanding tax amount per month for the first month, with an additional 5 percent for each month or part of a month. The penalty is charged until the return is filed and the tax is paid, or the penalty assessed is 25 percent of the tax amount owed.