Federal Failure to Pay Penalty

Hi everyone,

I was reading that for an individual, the interest rate for failure to pay by 4/15 is 3% plus short term rate of 0.12% compounded daily of the tax owed. Is this correct? So the client will get charged 3.12% of the unpaid balance daily?

Thanks in advance for any help.

That’s the annual rate, divide by I believe 360 for the daily rate

I pay for software that does this.

If you want to post your numbers, I'll run it for you. e.g. payment due date, amount due on payment due date, date paid, amount paid on date paid.

Remember that payments were due 5/17/21 for the 2020 tax year and 7/15/20 for the 2019 tax year.

That’s the annual rate, divide by I believe 360 for the daily rate

Thanks. That's what I was thinking.

I pay for software that does this.

If you want to post your numbers, I'll run it for you. e.g. payment due date, amount due on payment due date, date paid, amount paid on date paid.

Remember that payments were due 5/17/21 for the 2020 tax year and 7/15/20 for the 2019 tax year.

Oh nice! Thanks! Let me try with my tax software. If I can't do it, I'll message. you.

And, despite your topic heading, the discussion has been about interest. There are also potential penalties for failure to pay and failure to file.