IRS Penalty Statistics 2026: How Many Penalties the IRS Assesses and Abates

The IRS assessed 54,276,742 civil penalties in fiscal year 2025 (October 1, 2024, through September 30, 2025), according to IRS Data Book FY2025 Table 4-2. Individual, estate and trust income tax returns drew 46.7 million of them, totaling $33.1 billion, led by 24.3 million failure-to-pay penalties ($12.1 billion) and 15.7 million estimated tax penalties ($12.1 billion). The IRS recorded 5.5 million penalty abatements the same year, and the headline $1.25 trillion assessed is almost entirely employment-tax entries that were abated within the year.

Key takeaways:

• 54.3 million civil penalties were assessed in FY2025, up 37% from 39.6 million in FY2016 (IRS Data Book FY2025 Table 4-2; FY2016 Table 17)
• 46.7 million penalties, 86% of the total, landed on individual, estate and trust returns; failure to pay was the most common at 24.3 million
• Estimated tax penalties: 15.7 million assessed for $12.06 billion, about $766 each (our calculation), up from $1.81 billion in FY2022 as the IRS underpayment rate rose from 3% to 8%
• Only 1.4% of estimated tax penalties were abated by count, versus 13.0% of failure-to-pay penalties (our calculation from Table 4-2)
• $1.151 trillion of the $1.247 trillion assessed was employment-tax penalties, and $1.150 trillion of employment-tax penalties was abated the same year

Save this cheat sheet — key numbers in one image.

How Many Penalties Does the IRS Assess Each Year?

The IRS assessed 54.3 million civil penalties in FY2025 and recorded 5.5 million abatements, per IRS Data Book FY2025 Table 4-2. A civil penalty is an addition to tax for failing to file, pay, deposit or report correctly; an abatement reduces a penalty already assessed. Penalties reach far more accounts than audits: the IRS closed 497,621 examinations in FY2025 (Table 3-2), one for every 109 penalties (our calculation).

Source: IRS Data Book FY2025, Table 4-2 (published in thousands of dollars; rounded here).

Read the dollar column with care. Employment taxes account for $1.151 trillion of the $1.247 trillion assessed, and $1.150 trillion of employment-tax penalties was abated the same year; the Data Book does not explain the entries. Excluding employment taxes, FY2025 penalties total $96.5 billion assessed and $60.6 billion abated (our calculation). Counts are steadier: 4.46 million employment-tax penalties, close to FY2024's 4.41 million.

Which IRS Penalties Do Individuals Get Most Often?

Failure to pay is the most common IRS penalty on individuals: 24,251,980 assessments in FY2025, 52% of the 46.7 million penalties on individual, estate and trust returns (IRS Data Book FY2025 Table 4-2). Estimated tax penalties rank second. The Data Book labels the failure-to-file penalty "delinquency."

Source: IRS Data Book FY2025, Table 4-2. *Our calculation: amount divided by number, and FY2025 abatements divided by FY2025 assessments. Abatements can relate to earlier years' penalties, so these are ratios of annual flows, not the odds a given penalty is removed.

Accuracy-related penalties are rare but large, averaging $3,395, nearly seven times the average failure-to-pay penalty. Bad check penalties nearly quadrupled, from 571,240 in FY2016 (Table 17) to 2,209,697 in FY2025.

Estimated Tax Penalty Statistics: How Many People Pay the Underpayment Penalty?

The IRS assessed 15,734,656 estimated tax penalties on individual, estate and trust returns in FY2025, totaling $12.06 billion (IRS Data Book FY2025 Table 4-2). That is about $766 per penalty by our calculation, five times FY2022's $149 average. The IRC 6654 penalty applies when withholding and quarterly estimates fall short during the year, the usual way the self-employed filers in our self-employment statistics for 2026 pay tax.

Source: IRS Data Book civil penalties table, individual and estate and trust income taxes, FY2016–FY2025 editions.

The jump tracks interest rates. Under IRC 6654(a)(1) the penalty uses the IRC 6621 underpayment rate, the federal short-term rate plus 3 percentage points, applied to the underpaid amount for the period it was underpaid. That rate was 3% from January 2021 through March 2022 and 8% throughout 2024, so an identical shortfall cost about 2.7 times as much (our calculation). Rates are not the whole story: the average penalty rose 5.1 times from FY2022 to FY2025. FY2024 is the outlier: assessments dipped to $4.82 billion while estimated tax abatements reached $3.98 billion, against $105.3 million in FY2023. Price a specific shortfall with our estimated tax penalty calculator.

IRS Underpayment Interest Rates by Quarter, 2021–2026

Source: IRS quarterly interest rates, underpayment rate; 2026 confirmed in Rev. Rul. 2025-22, 2026-5, 2026-10 and 2026-15. The first-quarter 2027 rate had not been announced as of November 9, 2026.

For individuals, the first-quarter rate also covers April 1 through 15 when figuring the prior year's penalty (IRC 6621(b)(2)(B), as applied in Rev. Rul. 2026-5). By our reading, every day of a 2025 estimated tax shortfall through April 15, 2026 was charged 7%.

Why the Estimated Tax Penalty Is Rarely Abated

Abatements recorded in FY2025 equal just 1.4% of estimated tax penalties by count: 215,192 against 15.7 million (our calculation from Table 4-2). The IRS states that this penalty "generally cannot be waived due to reasonable cause." Relief is limited to a casualty, disaster or other unusual circumstance, retirement after age 62 or disability, and Form 2210 recalculations such as the annualized income method. First Time Abate and its replacement do not cover it.

The IRS's estimated tax penalty page lists the safe harbors: owe less than $1,000 at filing, or pay the smaller of 90% of this year's tax or 100% of last year's (110% if prior-year AGI exceeded $150,000). Our estimated tax penalty guide walks through Form 2210.

How Have IRS Penalties Changed Over the Last 10 Years?

Civil penalty assessments rose 37% in a decade, from 39.6 million in FY2016 to 54.3 million in FY2025, and penalties on individual, estate and trust returns rose 47%, from 31.7 million to 46.7 million (IRS Data Books FY2016–FY2025). Nearly all of that growth came after FY2022.

"Individual" means individual and estate and trust income taxes (Forms 1040 and 1041).

Two abatement spikes line up with IRS relief programs:

• FY2022: individual failure-to-file abatements reached 3,881,725 ($35.14 billion), more than the 3,371,240 assessed that year. On August 24, 2022, Notice 2022-36 waived or abated failure-to-file penalties on 2019 and 2020 returns filed by September 30, 2022; nearly 1.6 million taxpayers received more than $1.2 billion in refunds or credits (IR-2022-155).
• FY2024: individual failure-to-pay abatements reached 4,248,187 ($11.31 billion), up from 2,418,745 in FY2023. In December 2023 the IRS announced failure-to-pay relief for tax years 2020 and 2021 (Notice 2024-7); TIGTA counted about 4.9 million eligible taxpayers and approximately $1 billion of relief (TIGTA Report 2026-400-001).

Business and Payroll Penalties: Failure to Deposit and Late Entity Returns

Employment-tax returns drew 4,457,891 penalties in FY2025, including 2,259,214 failure-to-pay and 1,216,346 failure-to-deposit penalties under IRC 6656, per IRS Data Book FY2025 Table 4-2. The failure-to-deposit count stayed between 1.14 million and 1.22 million every year from FY2021 to FY2025.

Partnerships received 402,483 late-filing penalties under IRC 6698 in FY2025, assessed at $49.28 billion, and 183,845 abatements ($41.64 billion) were recorded, about 46% by count (our calculation). The IRS presumes reasonable cause for certain partnerships with 10 or fewer partners under Rev. Proc. 84-35. S corporations received 540,452 late-filing penalties under IRC 6699 ($1.04 billion), with abatements equal to 26% by count.

How Often Does the IRS Abate Penalties? First-Time Abate and the New Automatic Exemption

The IRS recorded 3,884,049 abatements worth $7.51 billion on individual, estate and trust returns in FY2025 (IRS Data Book FY2025 Table 4-2). The table names the grounds (IRS error, reasonable cause, collection costs not warranting collection, bankruptcy discharge, acceptance of partial payment) but does not count abatements by reason, so no published figure shows how many were first-time penalty abatements.

First Time Abate (FTA) has been the IRS's most common administrative waiver: relief from failure-to-file, failure-to-pay and failure-to-deposit penalties for filers with three years of timely compliance, granted only on request. TIGTA estimated that for tax year 2010 about 250,000 taxpayers with failure-to-file penalties and 1.2 million with failure-to-pay penalties qualified but did not receive it, leaving more than $181 million unabated (TIGTA Report 2012-40-113). Requests still go through a call, a letter or Form 843 for penalty abatement.

On July 8, 2026, the IRS announced the Automatic Exemption from Penalty (AEP) to replace FTA (IR-2026-83). A filer with three prior years of timely filing and payment (12 consecutive quarters for quarterly returns) is not assessed failure-to-file, failure-to-pay or failure-to-deposit penalties at all. AEP starts with tax year 2025 returns and 2026 quarterly returns, and FTA ends for original returns due on or after January 1, 2027. AEP excludes accuracy-related, information return and daily delinquency penalties (IRS Fact Sheet FS-2026-12), and the estimated tax penalty is not on the eligible list.

Because a qualifying late filing or payment under AEP never becomes an assessment, we expect FY2026 and later Data Books to show fewer failure-to-file and failure-to-pay assessments and fewer abatements. That is our expectation, not an IRS projection; compare years across the change with care.

IRS Penalty Rates and Amounts for 2026 and 2027

The failure-to-file penalty is 5% of unpaid tax per month and the failure-to-pay penalty is 0.5% per month, each capped at 25%, per the IRS failure to file and failure to pay pages.

Sources: IRS penalty pages; Rev. Proc. 2024-40, sections 2.53, 2.56–2.57; Rev. Proc. 2025-32, sections 4.52, 4.55–4.56; Rev. Rul. 2026-15.

Information return penalties under IRC 6721 (filing Forms 1099 or W-2 with the IRS) and IRC 6722 (furnishing payee copies) use the same amounts:

Source: Rev. Proc. 2024-40, sections 2.58–2.59; Rev. Proc. 2025-32, sections 4.57–4.58. The Data Book does not report information return penalties separately; they sit inside the 255,990 "nonreturn penalties" alongside preparer and trust fund recovery penalties. See our 1099 filing deadlines and penalties guide, the late filing penalty guide, and the IRS penalty and interest calculator.

What IRS Penalty Statistics Do Not Mean

• Fiscal year is not tax year. Table 4-2 counts penalties "recorded in Fiscal Year (FY) 2025 regardless of the tax year to which the penalties may apply" (footnote 1).
• Assessed is not collected. The table reports penalties charged, not paid. The Data Book's gross collections include penalties and interest with tax (Table 1-1, footnote 1), so the Data Book has no separate total of penalty dollars actually paid.
• Abatements are not tied to the same year's assessments. Estate and gift tax shows $2.01 billion abated against $724.4 million assessed in FY2025, possible only because abatements reach back to earlier years (footnote 2).
• Counts are penalties, not people. One late return with unpaid tax can carry both a failure-to-file and a failure-to-pay penalty, so 46.7 million penalties is not 46.7 million taxpayers.
• The $1.25 trillion is not a bill to Americans. Employment-tax entries of $1.151 trillion were offset by $1.150 trillion abated the same year.
• No breakdown by income, state or occupation exists. The table splits penalties only by type of tax and penalty, so it cannot show whether self-employed filers draw more penalties than W-2 employees.

IRS Penalty Statistics 2026: Five Facts to Cite

1. According to IRS Data Book FY2025 Table 4-2, the IRS assessed 54,276,742 civil penalties in fiscal year 2025, up 37% from 39,573,561 in FY2016.
2. According to IRS Data Book FY2025 Table 4-2, individual, estate and trust income tax returns received 46,748,796 civil penalties totaling $33.1 billion in FY2025.
3. According to IRS Data Book FY2025 Table 4-2, the IRS assessed 15,734,656 estimated tax penalties totaling $12.06 billion in FY2025, about $766 each by Jupid's calculation.
4. According to IRS Data Book FY2025 Table 4-2, the IRS recorded 3,884,049 penalty abatements worth $7.51 billion on individual, estate and trust returns in FY2025.
5. According to IRS Data Book FY2025 Table 4-2, employment-tax penalties made up $1.151 trillion of the $1.247 trillion in civil penalties assessed in FY2025, and $1.150 trillion of employment-tax penalties was abated the same year.

Methodology and How to Cite This Page

We downloaded each fiscal year's civil penalties table, FY2016 to FY2025, from the IRS Table 4-2 archive and read the files on November 9, 2026. The table was Table 17 in FY2016–FY2018, Table 26 in FY2019–FY2022, Table 28 in FY2023–FY2024 and Table 4-2 in the FY2025 Data Book (Publication 55-B, April 2026). Source amounts are in thousands of dollars; we converted and rounded them. Averages, abated shares, growth rates and totals excluding employment taxes are our calculations. Our IRS audit rates 2026 analysis uses the same Data Book edition for examinations.

How to cite: Jupid, "IRS Penalty Statistics 2026," November 2026, https://jupid.com/blog/irs-penalty-statistics-2026 (data: IRS Data Book FY2025, Table 4-2).

Books Ready Before the Next Due Date: How Jupid Helps

An estimated tax penalty starts with income that arrives during the year without tax paid on it by the quarterly due dates. Jupid keeps that income visible as it lands. Connect your bank and an AI bookkeeper inside WhatsApp or iMessage auto-categorizes each transaction at 95.9% accuracy, so your books stay current between quarterly due dates instead of being rebuilt in April. Ask in chat what you earned and spent this quarter, and the answer comes from your own categorized transactions. Try Jupid.

Sources

• IRS Data Book FY2025 (Publication 55-B), Table 4-2: Civil Penalties Assessed and Abated (XLSX; prior editions; full PDF incl. Table 3-2)
• IRS: Quarterly interest rates
• IRS: Underpayment of Estimated Tax by Individuals Penalty (IRC 6654) and Publication 505, Tax Withholding and Estimated Tax
• IRS: Failure to File Penalty (IRC 6651(a)(1), 6698, 6699) and Failure to Pay Penalty (IRC 6651(a)(2); 26 CFR 301.6651-1)
• IRS: Administrative penalty relief (FTA and AEP), IR-2026-83 and FS-2026-12
• Rev. Proc. 2024-40 and Rev. Proc. 2025-32
• Notice 2022-36 and IR-2022-155
• TIGTA Report 2026-400-001 and TIGTA Report 2012-40-113 highlights

---

This page is for general educational purposes and does not constitute tax, legal, or accounting advice. IRS Data Book figures describe penalties recorded in a fiscal year across all taxpayers and tax years, not the treatment of any individual return. If you receive a penalty notice, consult a qualified tax professional.