Taxes have to be filed and paid on time, but more importantly, they have to be paid. If you don’t, you’re facing penalties, possibly even jail time, and a long relationship with the IRS (where they’ll be issuing you notices even up to a decade!) Here are other actions that the federal agency does, or what you can expect in general from them if you don’t pay your taxes:
The IRS will impose penalties and will possibly forfeit any refund.
As mentioned, late penalties would be the main consequence of not paying. The fines could be anywhere between 0.5% and 25% of your unpaid taxes and add up every month that the bill is delayed. They will also hold onto any tax refund they owe you because of your failure to pay.
The IRS will give you plenty of chances and options to settle your debt.
They won’t force you to pay the entire costs upfront or seize your assets to settle your unpaid taxes. Instead, they give you opportunities to pay off the debt or control over how to do it. You can sign up for payment plans, negotiate for settlements, and even file for bankruptcy in the worst cases.
The IRS will deduct a portion of your wages.
IRS wage garnishments may be imposed by the agency as a last resort, or one of the last. They automatically deduct some of your salary, which may leave behind little for you.