Introduction
If you’re tempted to skip tax filing 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 assess failure-to-file penalties 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.
See if you may qualify to resolve your tax debt by completing our Tax Relief Survey.
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.
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 fixing your unfiled tax returns and resolving any outstanding tax debts.
Don’t let failure to file your taxes derail your financial future – get the help you need today.