Question

An individual files his 20X1 return one day late on April 16,20X2, enclosing payment for the full amount of tax due on the return. The IRS subsequently imposes a failure -to-file penalty on a notice and demand dated July 10,20X2, which the taxpayer pays on July 19. When, if at all, does interest begin to accrue on the penalty?

Answer 1

Generally, April 15 is the deadline for most people to file their individual income tax returns and pay any tax owed.If

you owe tax and don't file on time, there's also a penalty for not filing on time. The failure-to-file penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there's also a minimum penalty for late filing; it's the lesser of $435 (for tax returns required to be filed in 2020) or 100 percent of the tax owed.

Interest shall be imposed in respect of any assessable penalty, additional amount, or addition to the tax only if such assessable penalty, additional amount, or addition to the tax is not paid within 21 calendar days from the date of notice and demand therefor (10 business days if the amount for which such notice and demand is made equals or exceeds $100,000), and in such case interest shall be imposed only for the period from the date of the notice and demand to the date of payment.