2. Pay interest
Paying a penalty fee is not the only thing that could happen to you when failing to file/pay your taxes. Uncle Sam could also force you to pay interest. Let’s say that you failed to file and pay your taxes last year; the taxman just wants his money back at the time value they’ve had when they were owed.
Therefore, he will make you pay the penalty plus interest. And the interest is not determined by him but by the federal short-term rate that could be anywhere from 1 percent to 4 percent. However, if you are unable to pay penalties due to a reasonable cause, you may qualify for penalty relief. Check the IRS website for more pieces of information regarding this matter.
