What will the IRS do if you don't file your taxes?
As we inch toward the final tax filing deadline of April 15, millions of Americans are feeling the stress that comes with filling out the complex forms and the potential of owing money to the Internal Revenue Service (IRS). That, in turn, can make it tempting to ignore the tax filing deadline altogether. If you've found yourself in this situation as the clock is winding down, you may be wondering what might happen if you just ... don't file this year.
The short answer? Nothing good. While the IRS won't immediately dispatch agents to your door for unfiled taxes, ignoring your tax obligations generally sets in motion a series of increasingly hefty consequences that can impact your financial life for years to come. So, what may begin as a simple missed tax deadline can snowball into substantial penalties, interest charges and even legal trouble over time.
If you're behind on filing or are at risk of falling behind, though, don't panic. The IRS has mechanisms in place for those who've fallen behind on their tax obligations — and understanding what happens when you don't file can help transform an overwhelming tax situation into a manageable one.
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What will the IRS do if you don't file your taxes?
When you miss a tax filing deadline but are owed a refund, there's generally no penalty for filing late. The IRS typically won't force you to file and receive your refund. However, you only have three years from the original filing deadline to claim your refund before you forfeit it entirely. After three years, that money becomes government property.
For those who owe taxes, the consequences begin immediately after the filing deadline passes. One of the most immediate repercussions you'll face is the failure-to-file penalty. This is usually 5% of the unpaid taxes for each month your return is late, up to a maximum of 25%.
As time passes without filing (or paying), the IRS escalates its collection efforts. You'll begin receiving increasingly urgent notices by mail. If these are ignored, the IRS may file a "substitute return" on your behalf — which sounds helpful but typically isn't an ideal fix. Substitute returns are based only on the income the IRS knows about, so they won't include deductions, credits or exemptions you may be entitled to. That usually means you end up owing more than you really should.
After the substitute return is filed, the IRS will send a notice of deficiency that gives you 90 days to file your own return or petition the Tax Court. Ignoring this notice leads to a formal assessment of your tax liability, after which the IRS can begin more aggressive collection actions, including:
- Placing liens on your property
- Levying your bank accounts
- Garnishing your wages
- Seizing assets
- Revoking or denying your passport
In the most extreme cases of deliberate tax evasion, it is also possible to face criminal charges. However, you're unlikely to face criminal charges for simple non-filing, as they are typically reserved for fraudulent activity or substantial willful non-compliance instead.
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What are my options if I'm behind on filing taxes?
If you've fallen behind on filing your taxes, it's important to act promptly. The IRS offers clear steps you can take to fix the issue, and the most important one is to file your past-due returns as soon as possible. Getting those returns submitted stops the failure-to-file penalty and shows the IRS that you're making an effort — even if you can't pay the full amount you owe.
If you're several years behind on filing your taxes, it might be a good idea to consult with a tax professional. They can help you gather the necessary paperwork and make sure you're not missing out on any deductions or credits. In certain cases, the IRS will only require the last six years of returns to be filed, though it depends on your situation.
After filing, if you can't afford to pay what you owe, working with a tax relief company might come in handy. These companies specialize in helping people negotiate with the IRS. They can assist with setting up payment plans, Offers in Compromise (which is a settlement for less than the full amount owed), or help you apply for Currently Not Collectible status if you're facing financial hardship.
While tax relief companies do charge for their services, the right one can help reduce the stress of navigating the situation — and may also help you save money — by helping you avoid more serious consequences.
The bottom line
Ignoring tax obligations never makes them disappear — it only makes them grow more burdensome. The IRS has extensive powers to collect what it's owed, and the longer you wait to address unfiled taxes, the fewer options you'll have and the more expensive the resolution becomes.
If you've missed filing deadlines or are at risk of doing so this year, the best course of action is to face the situation head-on. File your missing returns as soon as possible, even if you can't pay in full immediately. The penalties for not filing are far more severe than those for not paying, and having returns filed opens doors to payment arrangements and other relief options.
