What Happens if You Don’t File Your Taxes?

If you're tempted to skip filing your taxes this year, think again. Not filing your taxes on time can lead to paying severe penalties and interest – and even land you in legal trouble down the line.

If you don’t file your tax returns on time, the IRS will first assess a failure-to-file penalty. This penalty can be a real budget-buster, amounting to 5% of your unpaid taxes for every month your return is late, up to a maximum of 25%.

That means if you owe $10,000 in taxes and file your return a full 5 months late, you're looking at an extra $1,250 tacked onto your bill - just for not filing on time. And that's on top of the taxes you already owe.

When taxpayers fill out our Tax Relief Survey, they are able to see if they qualify for the IRS Fresh Start Program and begin their journey toward tax resolution in minutes.

The IRS now has more flexibility when analyzing a taxpayer’s ability to pay back taxes. This makes the IRS Fresh Start Program available to a larger group of taxpayers. If you have been denied access to the program in the past, you may still qualify for relief today.

Thanks to a recent expansion of the Fresh Start Program, access to Installment Agreements and Offers in Compromise is now streamlined. An Offer in Compromise (OIC), allows taxpayers to settle their debt for less than the full amount.

Take this 60-Second Quiz to See if You Qualify for the IRS Fresh Start Program.

What Happens if You Don’t Pay Your Taxes?

If you also fail to pay your taxes by the deadline, you'll face an additional failure-to-pay penalty of 0.5% of your unpaid taxes per month, also maxing out at 25%. So if you really let things slide, you could be looking at penalties totaling up to 50% of your original tax bill.

And the IRS doesn't just stop at penalties. They'll also charge you interest on any unpaid taxes, which accrues daily until your balance is paid in full. When you add up all the penalties and interest, that initial tax debt can quickly snowball into a financial nightmare.

Potential Criminal Tax Charges

But the consequences of not filing your taxes go beyond just money troubles. Continued failure to file can potentially lead to more serious legal repercussions, including criminal charges for tax evasion. While the IRS typically reserves these measures for the most egregious cases, it's not a risk worth taking. Jail time and ruinous fines are a real possibility if you persistently refuse to meet your tax obligations.

If You Don’t File Your Taxes for Several Years

The consequences of not filing your taxes become even more severe the longer you go without filing. If you've avoided filing for multiple years, the IRS can pursue aggressive collection actions, including wage garnishments, bank account levies, and property seizures.

They may also file "substitute" returns on your behalf, which won't account for any deductions or credits you're entitled to - leaving you with a much larger tax bill. And the longer you go without filing, the more the penalties and interest will pile up, potentially leading to a financial hole that seems impossible to climb out of.

Even if you don't owe any taxes, failing to file for several years can jeopardize your eligibility for valuable tax credits and refunds. The bottom line is that ignoring your tax obligations for an extended period is a recipe for financial disaster. The smart move is to get back into compliance as soon as possible, even if it means facing some short-term pain.

Tax debt impacts countless Americans, yet many hesitate to seek IRS debt resolution. The hurdle isn't a lack of resources but the daunting complexity of IRS procedures that discourage the average person.

Dealing with the IRS often feels like a daunting, full-time commitment, prompting individuals to seek the expertise of reputable tax relief firms for maximum relief.

A common oversight is not realizing eligibility for tax relief, simply because many have not checked their qualifications for such programs.

It's important to note that checking your eligibility for the IRS Fresh Start Program is 100% FREE, and investing a few minutes could help you save THOUSANDS.

Get Compliant - Start the Process Today

The bottom line is this: there's simply no good reason to skip filing your taxes. The risks are far too great. If you're worried about owing money to the IRS, work with a tax professional to explore your options for setting up a payment plan or negotiating a settlement. But don't make the mistake of ignoring your tax obligations entirely - it's just not worth it.

Ready to get your taxes filed the right way? 

Take a moment to complete our Tax Relief Survey and see if you qualify for assistance in resolving any outstanding tax debts. Don't let failure to file your taxes derail your financial future - get the help you need today.

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At FreshStartInfo, we believe everyone deserves to be able to make tax decisions with confidence. We have dedicated, hard-working tax professionals and volunteers who ensure that the information on this site is current and as accurate as possible. While we always recommend you consult a tax professional for your specific situation, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.