Failure to File Penalties Will Increase in 2017

The Trade Facilitation and Trade Enforcement Act of 2015 (HR 644), which was signed into law by President Obama on February 24, increases the penalty for failure to file a return and puts a permanent moratorium on state and local taxation of Internet access. For taxpayers who fail to file their returns more than 60 days after the due date or extended due date, the Trade Act increases the minimum penalty from the lesser of $135 or 100 percent of the unpaid tax, to the lesser of $205 or 100 percent of the unpaid tax. The $205 penalty amount is adjusted for inflation under §6651(l). The increase in the penalty for failure to file is effective for returns required to be filed in calendar years after 2015.