By Priya Raman, Contributing Writer, Policy & RegulationA single dated table of the penalty rates, interest rate, and program thresholds the rest of this site's calculators and guides are built on, each figure cited to IRS.gov and checked this quarter.
As of July 2, 2026, the IRS charges a 0.5% monthly failure-to-pay penalty and a 5% monthly failure-to-file penalty, both capped at 25% of the unpaid tax, and sets its underpayment interest rate for individuals at 7% per year for the third quarter (July through September 2026), up from 6% in the prior quarter. Individuals can apply online for a streamlined installment agreement on balances of $50,000 or less, and an Offer in Compromise carries a $205 application fee, waived for taxpayers who meet the IRS's low-income guidelines. The table below lists these and other current figures with their IRS.gov source and the date each was verified.
Every figure below was checked against the cited IRS.gov page on July 2, 2026. Interest rates reset quarterly and penalty minimums are adjusted for inflation most years, so confirm the current number at the linked source before relying on it for a filing decision.
| Program | Figure | Value | Source (verified Jul 2, 2026) |
|---|---|---|---|
| Failure-to-pay penalty | Standard rate | 0.5%/month, capped at 25% | IRS.gov |
| Failure-to-pay penalty | During an approved installment agreement | 0.25%/month | IRS.gov |
| Failure-to-pay penalty | 10+ days after a levy notice | 1%/month | IRS.gov |
| Failure-to-file penalty | Standard rate | 5%/month, capped at 25% | IRS.gov |
| Failure-to-file penalty | Minimum penalty, 60+ days late (returns due in 2026) | Lesser of $525 or 100% of tax owed | IRS.gov, Topic 653 |
| Underpayment interest, individuals | Q3 2026 (Jul to Sep) | 7%/yr, compounds daily | IRS.gov |
| Underpayment interest, individuals | Q2 2026 (Apr to Jun), for comparison | 6%/yr | IRS.gov |
| Installment agreement | Long-term plan, online | Balance $50,000 or less | IRS.gov |
| Installment agreement | Short-term plan (up to 180 days), online | Balance under $100,000 | IRS.gov |
| Offer in Compromise | Application fee | $205, waived if low-income | IRS.gov |
| Offer in Compromise | Lump sum RCP multiplier | Remaining monthly income x12 | IRS Form 656 Booklet |
| Offer in Compromise | Periodic payment RCP multiplier | Remaining monthly income x24 | IRS Form 656 Booklet |
| First-Time Penalty Abatement | Clean compliance requirement | 3 years, no penalties | IRS.gov |
| Currently Not Collectible | Qualification basis | Financial hardship review, no fixed threshold | IRS.gov |
Download the full table as a CSV, with source URLs and verification dates for every row.
The IRS runs two separate penalties on an unpaid balance. The failure-to-pay penalty is 0.5% of the unpaid tax for each month or partial month it stays unpaid, capped at 25%; it drops to 0.25% a month once an installment agreement is approved, and rises to 1% a month starting ten days after a notice of intent to levy. The failure-to-file penalty is steeper at 5% a month, also capped at 25%, and carries a minimum penalty of $525 or 100% of the tax owed, whichever is less, for returns filed more than 60 days late. On top of both, the IRS charges interest on the unpaid balance at a rate set every quarter under Internal Revenue Code Section 6621. For July through September 2026, that rate is 7% per year for individual underpayments, compounded daily, up from 6% the previous quarter. Source: IRS.gov Failure to Pay Penalty, Failure to File Penalty, and Quarterly Interest Rates pages, verified July 2, 2026.
Individuals who owe $50,000 or less in combined tax, penalties, and interest can set up a long-term monthly payment plan directly through the IRS Online Payment Agreement tool, without submitting a detailed financial statement. A separate short-term plan, which gives up to 180 days to pay in full, is available online for balances under $100,000. Balances above these limits generally require Form 9465 or Form 433 and a closer look at your finances before the IRS approves a plan. These thresholds are the ones behind the site's IRS Payment Plan Calculator and the Fresh Start Program guide. Source: IRS.gov, Payment Plans; Installment Agreements, verified July 2, 2026.
An Offer in Compromise application carries a $205 fee, non-refundable, though the IRS waives it for applicants who meet its low-income certification guidelines. The IRS calculates a minimum acceptable offer from your "reasonable collection potential": your net equity in assets, plus a multiple of your remaining monthly income after allowed living expenses. For a lump sum offer, paid in five or fewer payments, that multiple is 12 months of income. For a periodic offer, paid over 6 to 24 months, it is 24 months of income, which is why periodic offers are typically higher. These are the same multipliers behind the site's Offer in Compromise Calculator. Source: IRS.gov, Offer in Compromise and the Form 656 Booklet, verified July 2, 2026.
Currently Not Collectible status pauses active IRS collection when paying would leave a taxpayer unable to cover basic living costs. The IRS bases the decision on a financial review under its Collection Financial Standards rather than a fixed dollar cutoff; the status is temporary, gets revisited periodically, and interest and the failure-to-pay penalty continue to accrue while it is in place. First-Time Penalty Abatement is a separate, narrower waiver: it removes the failure-to-file, failure-to-pay, or failure-to-deposit penalty for a taxpayer who filed on time and had no penalties (aside from the estimated tax penalty) for the prior three years, or 12 consecutive quarters. Requesting it does not require proving hardship, only a clean recent record. Source: IRS.gov, Temporarily Delay the Collection Process and Administrative Penalty Relief, verified July 2, 2026.
Every figure on this page comes from a named, dated page on IRS.gov, or from the IRS Form 656 Booklet, checked directly on July 2, 2026 (the dates in the table and CSV reflect that verification, not when the underlying IRS rule took effect). We did not use secondary summaries, tax-relief-company marketing pages, or older cached figures. Interest rates reset every quarter under IRC Section 6621, and inflation-adjusted dollar minimums (such as the failure-to-file floor) typically change once a year, so a figure correct in July 2026 can go stale within months. Where the IRS did not publish a specific number, such as an official Offer in Compromise acceptance rate, or a hard dollar cutoff for Currently Not Collectible, we left it out rather than estimate one. This page is reviewed and re-verified against IRS.gov on a quarterly cadence, alongside the interest-rate reset; the "verified" date in each table row and CSV record is updated at that time. Nothing here is tax advice, only a citation-ready summary of public IRS figures. Confirm your specific situation with the IRS or a licensed tax professional before acting on any number on this page.
Cite this page: IRSReliefGuide, "2026 IRS Tax Relief Programs Reference," 2026, https://irsreliefguide.com/irs-tax-relief-programs-reference.
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Open the calculatorFor the third quarter of 2026 (July through September), the IRS underpayment interest rate for individuals is 7% per year, compounded daily, up from 6% in the second quarter. The IRS resets this rate quarterly under Internal Revenue Code Section 6621.
The failure-to-pay penalty is 0.5% of unpaid tax per month, capped at 25%, and drops to 0.25% per month during an approved installment agreement. The failure-to-file penalty is 5% per month, also capped at 25%, with a minimum penalty of $525 or 100% of the unpaid tax, whichever is less, if a return is filed more than 60 days late.
Individuals can apply online for a long-term installment agreement if they owe $50,000 or less in combined tax, penalties, and interest. A short-term plan of up to 180 days is available online for balances under $100,000.
Yes. Rates and thresholds on this page are checked against IRS.gov each time it is reviewed, and the dateModified above reflects the last verification. IRS interest rates change quarterly, so confirm the current figure at IRS.gov before relying on it.
Priya Raman spends more time than is healthy comparing quarterly IRS rate updates against the prior quarter's, and she checks source dates before she checks anything else.