Updated November 5, 2026. Quick answer: For a return required to be filed in 2028 (tax year 2027), the failure-to-file addition under section 6651(a) for an income tax return filed more than 60 days late will not be less than the lesser of $555 or 100 percent of the tax required to be shown, up from $535 for returns filed in 2027, per IRS Rev. Proc. 2026-35, announced November 5, 2026.
The minimum for returns filed in 2028
Rev. Proc. 2026-35 states: “In the case of any return required to be filed in 2028, the amount of the addition to tax under § 6651(a) for failure to file an income tax return within 60 days of the due date of such return (determined with regard to any extensions of time for filing) will not be less than the lesser of $555 or 100 percent of the amount required to be shown as tax on such return.”
| Return required to be filed | Minimum addition to tax (lesser of this or 100% of the tax) | Source |
|---|---|---|
| Filed in 2026 | $525 | Instructions for Form 1120-S, minimum penalty for a return required to be filed in 2026 |
| Filed in 2027 | $535 | Rev. Proc. 2025-32, item .52 of section 3 |
| Filed in 2028 | $555 | Rev. Proc. 2026-35, item .57 of section 3 |
What section 6651 says
The base penalty is a percentage: “there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate;” The minimum applies only to a very late return. The statute says: “the addition to tax under paragraph (1) shall not be less than the lesser of $435 or 100 percent of the amount required to be shown as tax on such return.”
Section 6651(j) indexes the $435 for inflation and rounds it: “If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.” Check: $555 and $535 are both multiples of $5 (computed), and $555 is $20 more than $535 (computed).
What the minimum means in dollars
Because the minimum is the lesser of two amounts, it protects a small tax bill from a larger penalty. An invented return that owes $400 in tax and is filed more than 60 days late: the minimum is the lesser of $555 or 100 percent of $400, which is $400 (computed). A return that owes $3,000 in tax faces a minimum of $555 (computed as the lesser of $555 and $3,000). The 5 percent a month addition can exceed the minimum on a large balance. Relief for a first miss is on first time penalty abatement, the balance-due line is on Form 1040 line 37, amount you owe, and an extension of time to file is on Form 4868.
Which returns this covers
The Rev. Proc. says the minimum is for an “income tax return”, and the Form 1120-S instructions state the same rule for S corporations: “The minimum penalty for a tax return required to be filed in 2026 that is more than 60 days late is the smaller of the tax due or $525.” The due date for individual returns is on the Form 1040 due date for 2027.
Common mistakes
- Reading $555 as the penalty for any late return. It is a floor on the addition to tax when the return is more than 60 days late and tax is owed; the percentage amount can be larger.
- Forgetting the 100 percent cap. If the tax due is below $555, the minimum cannot exceed the tax.
- Using $535 for a return required to be filed in 2028. The Rev. Proc. sets $555 for those returns.
Related: first time penalty abatement, Form 1040 line 37, amount you owe, Form 4868, and the Form 1040 due date for 2027.
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Answer againSources
- Internal Revenue Service, Rev. Proc. 2026-35, tax year 2027 inflation-adjusted amounts (announced November 5, 2026): www.irs.gov
- Internal Revenue Service, Rev. Proc. 2025-32, tax year 2026 inflation-adjusted amounts, as modified by the One, Big, Beautiful Bill Act: www.irs.gov
- 26 U.S.C. 6651, Failure to file tax return or to pay tax (U.S. Code, U.S. Government Publishing Office): www.govinfo.gov
- Internal Revenue Service, 2025 Instructions for Form 1120-S: www.irs.gov
Read from the primary documents linked above on November 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.