In the Trade Facilitation and Trade Enforcement Act of 2015 (HR 644), passed and sent to the President for signature on February 11, 2016, Congress has raised the minimum penalty amount for the case where a taxpayer fails to timely file certain returns (including income, estate and gift tax returns) within 60 days of the date they are due to $205 or 100% of the tax due (whichever is less).
The failure to file penalty under IRC §6651(a) normally applies at a rate of 5% of the tax due per month (or fraction of a month) the return goes unfiled, maxing out at 25% of the tax due. The penalty can be avoided if the taxpayer shows that the failure to file was due to reasonable cause and not willful neglect.
A special rule serves to increase that penalty on returns filed more than 60 days late where there is a relatively small amount of tax due. This minimum penalty previously was equal to the lesser of 100% of the tax due or $135. The increase in the penalty applies to returns required to be filed in calendar years after 2015.
The increase was part of a bill that, in addition to the trade provisions, included a permanent extension of the Internet Tax Freedom Act.