The IRS generally charges interest on any unpaid balance.
- It charges interest on tax, penalties, and interest until the balance is paid in full.
- Interest accumulates daily.
- Interest stops accruing as soon as you pay your balance in full.
- The interest rate is determined every three months (quarterly). This doesn’t change the interest rate for prior quarters or years.
- Interest on the failure to file penalty, also called the delinquency penalty, starts on the return due date, including any extension of time to file.
- Interest on the failure to pay, estimated tax, and dishonored check penalties starts on the notice date of that penalty amount.
- Interest on penalties related to the accuracy of your tax liability starts on the return due date, including any extension of time to file.
