There are two penalties that apply to this scenario: Failure to File and Failure to Pay. The Failure to File penalty applies when the return is filed past the deadline with no extension, or past the extension deadline if an extension was filed. Failure to Pay applies to any balance due that is not paid by the original filing deadline (April 15).
Both penalties are based on a percentage of the balance due, assessed each month or part of the month a return and/or payment is late. Generally, they do not exceed 5% for each month, or 25% of the total balance due. This is current for tax year 2024. The IRS has a breakdown on how they are calculated here: IRS Failure to File Penalty | IRS Failure to Pay Penalty
Regarding possible tax abatement, you may be eligible for penalty First Time Abate. To qualify, generally you must have what is considered a history of good tax compliance. The IRS defines this as:
- Filed the same return type, if required, for the past 3 tax years before the tax year you received the penalty.
- Didn't receive any penalties during the prior 3 years, or any penalty was removed for an acceptable reason other than First Time Abate
Generally, to apply, you can call the number on the IRS notice you receive relating to the penalty.
More information about IRS Administrative Penalty Relief (including First Time Abate) is available here: IRS Administrative Penalty Relief
Beyond requesting penalty relief, the best strategy is to pay the balance due as soon as possible to mitigate the amount of penalties and interest that accrue.
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