If you do not file your taxes and pay on time, the IRS will charge you a combined penalty. The monthly penalty is 5.0% for filing late and 0.5% for paying late. The combined penalty, therefore, is 5.5% of your unpaid tax for each month or part of a month your return is late, but not for more than five months, totaling 27.5% (25.0% late filing and 2.5% late paying). In addition to the 27.5% late filing/filing penalty, the IRS will continue to charge the 0.5% late paying penalty for each month or part of a month as long as the tax is unpaid, but not to exceed 25%. Therefore, the maximum penalty the IRS will charge for late filing and paying is 52.5% (27.5% late filing and additional 25% late paying). If you did not file your return within 60 days of the due date, the minimum penalty is $210 or 100% of the balance of the tax due on the return, whichever is smaller. If you do not pay your taxes when they are due, the IRS will charge you a failure-to-pay penalty. Initially, the penalty is 0.5% of the unpaid tax for each month or part of a month you didn’t pay your tax. If you file your return on time, this penalty will be reduced to 0.25% for any month in which you have an Installment Agreement in effect with the IRS. If the IRS issues you a Notice of Intent to Levy and you do not pay the balance due within 10 days from the date of the Notice, the penalty will increase to 1.0% a month. But, again, the late paying penalty cannot be more than 25% of the tax paid late. If you think the IRS should remove or reduce the above penalties, consider requesting from the IRS an abatement of penalties.