What Happens if You Fail to File Your Taxes?


What happens if you don’t file taxes? You may incur penalties and accrued interest. Learn more about the consequences of failing to file and how to fix it.

Get Back on Track With the IRS: What Happens if You Don’t File Taxes?

Let’s face it, the process of filing taxes can be overwhelming given all the documents and processes you have to follow. Whether you’re doing this for the first time or for the 30th time, the experience is never pleasant and you may be tempted to skip the process. 

What happens if you don’t file taxes? You could end up with a heavy penalty. The amount of penalty depends on how much you owe the IRS every month. 

Read on to learn more about what happens if you don't file taxes for years as well as what happens if you don’t file your taxes but don’t owe anything. 

Consequences of Failing to File Your Tax Returns

What happens if you don’t file taxes for 1 year? The IRS can and will penalize you for a late filing fee if you fail to file your tax returns before the deadline. 

For this year, you’ll get penalized a fee of 5% of the taxes you owe each month after the tax day that you fail to submit your returns. This penalty maxes out at 25% of the taxes owed. 

What Happens if You Don’t File Taxes for 5 years?

If you fail to file your taxes for five years, the IRS can go after you to collect unpaid taxes by freezing your bank accounts, putting a lien on your house, or garnishing your wages. 

What Happens if You Don’t File Taxes for 3 Years?

What happens if you don’t file taxes for 3 years? Failure to file taxes for years has serious repercussions. You’ll owe the IRS more than the taxes you failed to pay on time. Depending on your situation, you may need to pay penalties for non-compliance, which means a penalty for failing to file and failing to pay the penalty. 

What’s more, the IRS charges 3% interest on the amount owed for each year you fail to pay. That, combined with the tax you owe every year, can accumulate to a large sum of money. 

Although you can negotiate with the IRS on the amount you can afford to pay, they can still charge you with a criminal offense within a three-year period. 

In certain circumstances, the IRS may waive your penalties, but you still have to pay what you owe. You’ll need to provide a reasonable cause for you to be eligible for the penalty. Some examples would be incapacitation, death, natural disasters, to name a few. 

What Happens if You Don’t File Your Taxes but Don’t Owe Anything?

In a situation where you don’t file your taxes but don’t owe anything to the government, you are not required to file your taxes. Also, if you do file late, you won’t receive a penalty. However, if you are owed a  refund, but fail to file within three years after the tax date, the IRS keeps it. 

Nonetheless, you should note that state tax-filing requirements vary from one state to the other. You may be required to file a return in some cases even if you don’t owe tax. In this case, you need to understand the state regulations to know what happens if you fail to submit your tax documents. 

Failing to Pay Taxes

You’ll be shocked to learn that penalties for failing to pay your taxes on time are lower than for filing late. Every month past the payment date, you get assessed 0.5% of your tax bill as a penalty. That fee maxes out at 25% of your tax bill. 

Note that the interest accrues on unpaid taxes above the penalty for failure to pay on time. Your interest goes up if the short-term rates go up before you fully pay. 

Importance of Filing if You Can’t Pay

Tax experts recommend that you file even if you can’t pay your taxes.  You can file by April 15th or request an extension by April 15th. That should give you an extra six-month window to file the taxes. Ignoring your taxes could make the IRS file charges for tax evasion, seize your property, or file a notice of a federal tax lien. 

If you can’t pay your tax bill on time, the IRS provides an installment payment plan. The installment plan approval is automatic if you owe the government $25,000 or less. You also qualify for the installment plan if you prove that you can’t pay the amount by the due date. But you do have to show that you can pay off the tax in three years or less.

What Should You Do If You Haven’t Filed or Paid Taxes in Years?

What happens if you never file taxes? The IRS can collect taxes for up to ten years after you owed them. While there are exceptions for the period when you might have declared bankruptcy or lived outside the country. If you plan to apply for an installment plan, you need to take the necessary steps if you haven't filed your returns for years. 

Some of these steps include:

Getting Tax Transcripts From the IRS

The IRS keeps transcripts for each year you got an income if your employer submitted that income reports. You can request for a transcript to know what the IRS believes you owe them. The five types of transcripts include the tax return transcript, the tax account transcript, wage and income transcript, and record of account transcript. 

File The Taxes

The next step is to file your taxes. Ensure that you gather all the documents required like the 1099 and W2s as you’ll need them to file taxes for every year you skipped. You can also reach out to the IRS as they have a database of tax return forms

You can use a tax preparation software as it helps you fill for prior years more quickly than doing it manually. 

After filing your taxes, you’ll now know whether you owe money or you’re eligible for a tax refund. However, the amount owed may reduce considerably over the years due to interest and penalties. File and pay the tax liability owed. The IRS offers a few payment options, one of which might work for you.

You may want to enlist the help of a tax professional to help you manage your taxes and fill out the forms.  Working with an experienced tax professional will ensure that you’re accounting for the exemptions and deductions for each year when you were filing back taxes. 

If you find the tax liability too high for you to pay, you need to move to the next step. 

Call the IRS

The final step is to call the IRS if you owe more than you can afford. Call the IRS and ask for an installment payment plan. You’ll find the process lenient if you have been paying taxes all this time by withholding them from your paycheck unlike when you evaded taxes all the time. 


Hopefully, you now have an idea of what happens if you don’t file a tax return. It’s crucial to file your tax return as soon to avoid accruing penalties and other charges. You should also pay all the tax that is due if you have any. The IRS calculates late penalty and interest charges from the date of your return were due.  

If you have issues filing your tax returns or you need help with the process, you can call or visit our ATAX offices. We have experienced and qualified tax professionals who are available to help file personal taxes, payroll, bookkeeping, business taxes, and more. 

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