Failing to file taxes can have serious consequences. Not filing taxes is a criminal offense. The IRS can prosecute individuals and businesses who don’t file taxes. Penalties for tax evasion can include fines of up to $100,000 and up to five years in prison. In cases of fraud, the penalties can be even more severe.
The IRS can also impose fines of up to 25% of unpaid tax amount for failure to file taxes. If taxes aren’t paid, the IRS may charge interest on unpaid amount. If taxes aren’t paid, the IRS may seize assets such as bank accounts, vehicles, and even real estate.
Not filing taxes can also lower credit score. The IRS can report unpaid taxes to credit bureaus which can result in a lower credit score. This can make it hard to obtain loans or credit in the future.
Not filing taxes can also prevent you from receiving government benefits. The IRS can also prevent you from obtaining or renewing a passport if you owe back taxes.
For businesses, not filing taxes can result in penalties, fines and the revocation of business licenses. The IRS can impose fines and penalties, and seize business assets. State and local governments may revoke business licenses if taxes aren’t paid, which can put a business out of operation.
Even if you cannot afford to pay taxes, it is important to file a return. The IRS offers payment plans and other options to help taxpayers pay their taxes. If you cannot afford to pay your taxes, contact the IRS as soon as possible to discuss options.
In summary, not filing taxes can have serious consequences for individuals and businesses. It is a criminal offense with fines, penalties, legal repercussions, and even prison time. Not filing taxes can negatively impact credit score and prevent government benefits. Contact the IRS if you can’t afford to pay taxes to discuss options. It’s better to file taxes on time than wait for the IRS to come after you.