During any month in which both the failure to file penalty and the failure to pay penalty apply, the failure to file penalty is reduced by the amount of the failure to pay penalty.

Question

Quizplus · Accepted Answer

This is correct according to IRS rules. If both penalties apply in the same month, the failure to file penalty is reduced by the amount of the failure to pay penalty. However, interest will still apply on any unpaid tax amounts.

During Any Month in Which Both the Failure to File