{"id":10850,"date":"2024-12-27T16:33:14","date_gmt":"2024-12-28T00:33:14","guid":{"rendered":"https:\/\/www.irs.com\/?p=10850"},"modified":"2025-03-18T16:05:58","modified_gmt":"2025-03-18T23:05:58","slug":"what-happens-if-you-dont-file-taxes","status":"publish","type":"post","link":"https:\/\/www.irs.com\/en\/what-happens-if-you-dont-file-taxes\/","title":{"rendered":"What Happens If You Don&#8217;t File Taxes?"},"content":{"rendered":"<div style=\"width: 640px;\" class=\"wp-video\"><video class=\"wp-video-shortcode\" id=\"video-10850-1\" width=\"640\" height=\"360\" preload=\"metadata\" controls=\"controls\"><source type=\"video\/mp4\" src=\"https:\/\/www.irs.com\/wp-content\/uploads\/2025\/03\/Consequences_of_Not_Filing_Taxes.mp4?_=1\" \/><a href=\"https:\/\/www.irs.com\/wp-content\/uploads\/2025\/03\/Consequences_of_Not_Filing_Taxes.mp4\">https:\/\/www.irs.com\/wp-content\/uploads\/2025\/03\/Consequences_of_Not_Filing_Taxes.mp4<\/a><\/video><\/div>\n<h1><\/h1>\n<p>Failure to file your taxes, or filing them late even if you get a tax extension, can bring about bothersome and potentially serious consequences for you, <a href=\"https:\/\/www.irs.com\/en\/irs-penalty-calculators\">from hefty fines to severe legal troubles<\/a> depending on the amount owed and how long you haven\u2019t paid them.<\/p>\n<p>That much you probably know already, but there are always related questions around the topic such as: Can you go to jail for not filing taxes? How much is the penalty for not filing your taxes? What if you <i>can\u2019t <\/i>pay your taxes?<\/p>\n<p>Breaking news: It\u2019s bad for you to not file your taxes. Also, water is wet and the sky is blue. It might seem painfully obvious to state that failure to file or <a href=\"https:\/\/www.irs.com\/en\/e-file-taxes-online-for-free\/\">e-file your taxes<\/a> has some pretty bad consequences, but it\u2019s necessary to part from there so we can go over exactly what happens.<\/p>\n<p>How long will it take for the IRS to notice and take action? What&#8217;s the difference between not filing and not being able to pay? And finally, what can you do to avoid all of these situations?<\/p>\n<h2>What Happens If You Don\u2019t File Your Taxes<\/h2>\n<p>It\u2019s important to differentiate between the different scenarios that can occur. It\u2019s a different conversation with its own set of consequences to file your taxes and fail to pay them, but right now we will focus on what happens if you don\u2019t even file your taxes at all in the first place.<\/p>\n<p>Both scenarios are even contemplated by the IRS in their respective penalties: The Failure to Pay Penalty, and the <a href=\"https:\/\/www.irs.gov\/payments\/failure-to-file-penalty\" target=\"_blank\" rel=\"noopener\">Failure to File Penalty<\/a>.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-10932 aligncenter\" src=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14-1024x559.png\" alt=\"what-happens-if-you-dont-file-taxes\" width=\"640\" height=\"349\" srcset=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14-1024x559.png 1024w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14-300x164.png 300w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14-768x419.png 768w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14-18x10.png 18w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_14.png 1408w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>Let\u2019s get it out of the way: It\u2019s better for you in the long run to file your taxes even if you know you can\u2019t pay them. For starters, filing your taxes before the deadline will let you avoid the Failure To File penalty we mentioned.<\/p>\n<p>At least file for an extension if you\u2019re strapped for both cash <i>and <\/i>time. An extension will give you until October 15 to complete your return and prevent the IRS from piling on the penalties for not filing your taxes on time.<\/p>\n<h3>The Penalties For Not Filing Taxes<\/h3>\n<p>The first thing the IRS will do if you don\u2019t file your taxes is imposing a <i>failure to file <\/i>penalty, which is 5% of your unpaid tax balance. An additional 5% will stack each month after that up to a maximum of 25% of what you owe after five months have passed.<\/p>\n<p>It follows that if you\u2019re not filing your taxes, you probably aren\u2019t paying them either, so the IRS will move on to a <i>failure to pay <\/i>penalty, which is 0.5% of your unpaid taxes for each month you don\u2019t pay; this penalty also won\u2019t exceed 25% of your tax liability.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-11610 aligncenter\" src=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/Screenshot-2025-03-03-213950.png\" alt=\"\" width=\"582\" height=\"307\" srcset=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/Screenshot-2025-03-03-213950.png 974w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/Screenshot-2025-03-03-213950-300x158.png 300w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/Screenshot-2025-03-03-213950-768x405.png 768w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/Screenshot-2025-03-03-213950-18x9.png 18w\" sizes=\"auto, (max-width: 582px) 100vw, 582px\" \/><\/p>\n<h3>Interest On Penalties<\/h3>\n<p>It should come as no surprise that the IRS charges interest on penalties. The interest for the <i>failure to file <\/i>penalties are due on the return date, and the <i>failure to pay<\/i> penalties are due on the date you\u2019re notified (or when the penalty is assessed).<\/p>\n<p>Therefore, you won\u2019t be charged interest if you pay the amount owed on or before the \u201cpay by\u201d date that appears on your notice.<\/p>\n<h3>Federal Tax Liens And Levies<\/h3>\n<p>Whether you don\u2019t file or pay your taxes, letting the problem go on too long will lead you to face federal tax liens or levies. Let\u2019s go over each of them.<\/p>\n<p>A <a href=\"https:\/\/www.irs.com\/en\/how-handle-federal-tax-lien\/\">federal tax lien<\/a> is an official warning issued by the U.S. federal government, essentially a statement of intent about seizing your property in lieu of payment for your taxes.<\/p>\n<p>Since the lien is part of public record, financial institutions will be able to see it and may refuse to provide their services to you because of it.<\/p>\n<p>A <a href=\"https:\/\/www.taxpayeradvocate.irs.gov\/get-help\/interacting-with-the-irs\/levies\/\" target=\"_blank\" rel=\"noopener nofollow\">federal tax levy<\/a> is more complicated since it involves the actual seizure of your property \u2014 both personal and real \u2014 to pay for your tax debt, and it can happen whether you fail to pay your taxes or if you default on a payment plan.<\/p>\n<p>It\u2019s possible to issue a lien and a levy at the same time. Some types of personal property are considered exempt from being levied, as well as some of your major assets depending on the amount owed to the IRS.<\/p>\n<h4>How Long Until The IRS Can Seize Your Funds<\/h4>\n<p>Once the levy on your property is issued and you have been notified, you have 30 days to respond before the levy goes into effect.<\/p>\n<p>In case the levy is targeting the funds in your bank account, the bank will freeze those funds and hold them for a period of 21 days; after the period is over, those funds will be transferred to the IRS to pay your outstanding tax balance.<\/p>\n<p>While all of these are serious (and are supposed to sound serious), the main thing you should take away from this explanation is that a failure to file your tax returns will <b>most likely lead to penalties<\/b>, but not jail time (at least not in most cases).<\/p>\n<p>There is a different set of circumstances and actions surrounding the failure to pay taxes that can lead to criminal investigations that could, eventually, land someone in jail, but they\u2019re not really what we\u2019re going for with this guide.<\/p>\n<h3>IRS Payment Plans<\/h3>\n<p>Next thing you will definitely want to do is to start paying your taxes in monthly installments instead of a lump sum during Tax Day. Here are the most common payment plans contemplated by the IRS:<\/p>\n<ul>\n<li><b>One Time Payment:<\/b> The payment is done either by debit or credit card. This one-time payment option is probably only good if you somehow know you\u2019re going to get enough money to cover your tax liability at a later time than Tax Day.<\/li>\n<li aria-level=\"1\"><b>Short-Term Payment Plan (180 days or less): <\/b>Perhaps the most convenient payment plan devised by the IRS, the short-term plan has no set up fees and you can pay through check, money order, debit or credit card (fees do apply to card payments), or directly from your bank account using Direct Pay.<\/li>\n<li aria-level=\"1\"><b>Long-Term Payment Plan (180 days or more): <\/b>Because of the extended period of time afforded to you, this plan has a couple of potential fees in order to set it up. The set-up fee is $31 if you use direct debit (which can get waived for low income taxpayers) and a whopping $130 if you don\u2019t use direct debit.<\/li>\n<\/ul>\n<p>To set up a payment plan, you have to go through the <a href=\"https:\/\/www.irs.gov\/payments\/online-payment-agreement-application\" target=\"_blank\" rel=\"noopener\">online payment agreement application<\/a> or by filing Form 9465. You can also call the IRS or even visit their offices to get guidance on how to set up the plan. Keep in mind that if you owe more than $50,000, the terms of your payment plan will be different.<\/p>\n<h2>Is Not Filing Taxes The Same As Tax Evasion?<\/h2>\n<h3>Tax Evasion Vs. Tax Avoidance<\/h3>\n<p>Both of these terms, although often used interchangeably, are actually very different concepts, and both are considered as separate things (with only one of them actually being a violation).<\/p>\n<p>Tax avoidance is defined as \u201can action taken to lessen tax liability and maximize after-tax income\u201d; while the word <i>avoidance<\/i> makes it sound a little sketchy, the IRS still considers it perfectly legal.<\/p>\n<p>It does make sense if you think about it, as almost any taxpayer is eligible to claim deductions, credits, and other adjustments to make them pay less and get more refunded.<\/p>\n<p>On the other hand, tax evasion\u2014 which is defined as the failure to pay or a deliberate underpayment of taxes \u2014 is illegal, plain and simple.<\/p>\n<p>The most common way that people evade taxes is underreporting their total income for the year, particularly when the money comes from non-traditional sources such as illegal activities and the underground economy.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-10933 aligncenter\" src=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16-1024x559.png\" alt=\"what-happens-if-you-dont-file-taxes\" width=\"640\" height=\"349\" srcset=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16-1024x559.png 1024w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16-300x164.png 300w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16-768x419.png 768w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16-18x10.png 18w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/image_fx_16.png 1408w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<h2>Common Misconceptions About Not Filing Taxes<\/h2>\n<p>There are many myths and <a href=\"https:\/\/www.irs.com\/en\/tax-debt-myths-and-facts-about-owing-money-to-the-internal-revenue-service\/\">misconceptions surrounding the failure to file<\/a> your tax returns on time. Here are some of the most common ones and the reasons why you should stop believing them if you want to stay out of trouble with the IRS.<\/p>\n<h3>If You Don\u2019t Owe Taxes You Don\u2019t Have To File<\/h3>\n<p>Wrong! As we described before, filing a tax return is mandatory even for taxpayers who technically owe nothing to the IRS, provided that their income is above a certain threshold (which is quite low, don\u2019t get\u00a0 your hopes up).<\/p>\n<p>By choosing not to file a return because you don\u2019t owe taxes is just opening yourself up to penalties and other legal consequences down the line.<\/p>\n<p>On top of that, by not filing a return during tax season means you\u2019re missing out on refunds or credits that you probably qualify for, such as the Earned Income Tax Credit (EITC).<\/p>\n<h3>You Don\u2019t Have To File If You Don\u2019t Make Money<\/h3>\n<p>It\u2019s a very common misconception that people with low or no income are exempt from filing taxes.<\/p>\n<p>As mentioned in the previous section, there are income thresholds that do exempt some individuals, but employee wages are far from the only type of taxable income; for example, making even $400 or more from self-employment obligates you to file and pay taxes on those earnings.<\/p>\n<h3>The IRS Hasn\u2019t Contacted Me So I Just Don\u2019t File<\/h3>\n<p>Big mistake. Just because the IRS hasn\u2019t sent an audit request doesn\u2019t mean you\u2019re not on their radar. The IRS relies on plenty of tools other than self-reporting to track your income.<\/p>\n<p>Employers also file Forms W-2 and 1099, and financial institutions can submit account activity, both of which can be used to catch up with you. So, the IRS not contacting you doesn\u2019t put you in the clear; on the contrary, it will only increase penalties once they do.<\/p>\n<h3>I Haven\u2019t Filed Taxes In Years, So I\u2019m Too Far Behind To Catch Up<\/h3>\n<p>While it\u2019s true that paying back taxes is an intimidating prospect (particularly if you\u2019ve neglected them for years), the fact is that ignoring them is only delaying the inevitable as there is no statute of limitations to speak of when it comes to back taxes.<\/p>\n<p>Instead, it\u2019s preferable to take the chance offered by the IRS to <a href=\"https:\/\/www.irs.com\/en\/tax-tips-filing-late-return\/\">file late tax returns<\/a>, as catching up (slow as it may be) may reduce your penalties or avoid them completely in some cases. Along with payment plans, this is a good way to minimize the consequences of a bad track record with taxes.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-11607 size-large\" src=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-1024x683.jpg\" alt=\"what-happens-if-you-don't-file-taxes\" width=\"1024\" height=\"683\" srcset=\"https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-1024x683.jpg 1024w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-300x200.jpg 300w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-768x512.jpg 768w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-1536x1024.jpg 1536w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-2048x1365.jpg 2048w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-18x12.jpg 18w, https:\/\/www.irs.com\/wp-content\/uploads\/2024\/12\/pexels-tima-miroshnichenko-6266684-640x426.jpg 640w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<h2>What Happens If You Don\u2019t File Taxes: FAQ<\/h2>\n<p><b>1. Can the IRS file my tax return for me?<\/b><\/p>\n<p>The IRS can actually file a return for you through a form called <a href=\"https:\/\/www.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/tax-dictionary-substitute-return-sfr\/?srsltid=AfmBOorHrKRxJc_weKlzQ_SI7ncQv5OwDrrghz2Wru3eE9ecM237chN_\" target=\"_blank\" rel=\"noopener nofollow\">Substitute For Return<\/a>. This document will only include the income reported by your employers, and will not allow for deductions, credits or exemptions in your favor. Also, the substitute for return will carry a late-filing penalty, so all in all, it\u2019s definitely not a good replacement for filing your own tax return.<\/p>\n<p><b>2. Can I go to jail for not filing my tax return?<\/b><\/p>\n<p>The truth is that it depends on multiple factors. While failing to file a tax return is a misdemeanor, the IRS would have to prove that an overt, willful act of tax evasion has occurred in order to elevate the situation to a felony, which would then be grounds for a jail sentence if the taxpayer is found guilty (which, honestly, is the likeliest scenario). That being said, the IRS usually only doles out civil penalties to most people, followed by numerous warnings and plenty of chances to file even years after the first offense.<\/p>\n<p><b>3. Can I file my own return after the IRS files a return for me?<\/b><\/p>\n<p>Yes, you can file a past-due return of your own over the substitute for return issued by the IRS through an \u201cSFR reconsideration. You will still have to pay the \u201cfailure to file\u201d penalty, but filing your own return allows you to claim exemptions, credits and adjustments, while the SFR does not.<\/p>\n<p><b>4. Is there a statute of limitations on late tax returns?<\/b><\/p>\n<p>Unfortunately no, there is no such thing as a statute of limitations on unfiled tax returns. No matter when it happened, the IRS can go back to any year that you didn\u2019t file your taxes and issue penalties based on your tax liability that year. Still, the IRS doesn\u2019t usually allow for unfiled tax returns to become older than six years in order to enforce actions against taxpayers, and they can even freeze your latest filed return until you file and pay the one you owe.<\/p>\n<p><b>5. When is my tax return considered \u201clate\u201d?<\/b><\/p>\n<p>Any individual tax return postmarked after midnight on Tax Day (which is April 15), although the date can be pushed back to the next business day in case April 15th falls on the weekend. Also, if you mail your return, they will be considered filed on the day they were filed and not when the IRS receives them, but remember that the post office no longer stays open until midnight on Tax Day. People living outside the U.S. automatically get a two-month filing extension.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Failure to file your taxes, or filing them late even if you get a tax extension, can bring about bothersome and potentially serious consequences for you, from hefty fines to severe legal troubles depending on the amount owed and how long you haven\u2019t paid them. That much you probably know already, but there are always [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":10930,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9,36,157,171],"tags":[],"class_list":["post-10850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-filing-taxes","category-past-tax-returns","category-tax-filing","category-tax-tips"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=10850"}],"version-history":[{"count":9,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10850\/revisions"}],"predecessor-version":[{"id":12397,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/10850\/revisions\/12397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/10930"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=10850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=10850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=10850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}