If you missed the tax filing deadline without submitting Form 4868, don't panic—but do act quickly. The IRS assesses penalties based on how long a return is delinquent and whether you owe a balance or are entitled to a refund.
Failure-to-File vs. Failure-to-Pay Penalties
- Failure-to-File Penalty: Charged at 5% of the unpaid taxes for each month the return is late (capping at 25%). If you are entitled to a refund, there is zero penalty for filing late.
- Failure-to-Pay Penalty: Charged at 0.5% per month of the unpaid tax liability until paid in full.
How First-Time Penalty Abatement (FTA) Works
The IRS offers an administrative waiver known as First-Time Abatement. If you have a clean compliance record for the preceding three tax years (no unfiled returns or prior penalties), you can request complete removal of late-filing and late-payment penalties.
Streamlined Filing for Multi-Year Delinquent Expats
If you are a U.S. citizen or green card holder abroad who failed to file for multiple years due to non-willful conduct, the IRS Streamlined Foreign Offshore Procedures allow you to catch up on 3 years of returns and 6 years of FBARs with zero failure-to-file penalties.