Letting the tax deadline slide might feel harmless, but the IRS doesn’t do “forgiveness.” Forgetting to file sets off a chain of consequences—some fast, others sneaky. Either way, none are fun. No, silence won’t save you. Want to know what really happens when you leave taxes hanging? Here are ten ways the IRS makes sure you don’t forget again.
You’ll Owe A Failure-To-File Penalty
Missing the tax filing deadline? Expect a 5% penalty each month you delay—capped at 25%. It’s much worse than the failure-to-pay fee. File on time to avoid the bigger cost, even if payment isn’t ready. In some cases, applying for an extension shields you from this entirely. So, don’t risk it.
The IRS Might File A Substitute Return For You
If you don’t file, the IRS might take over and prepare a return using info from your employer and bank. But don’t expect any help—credits and deductions you qualify for won’t be included. That usually leads to a higher tax bill. The bright side is that you can still file your own return to fix it.
You Could Lose Your Tax Refund
Fail to file within three years, and your refund disappears permanently. You’re not charged anything on a failed refund, but waiting too long will cost you. The IRS collected over $1 billion in expired refunds in 2024. File on time to keep what’s yours—don’t leave your money sitting in their hands.
Interest On Unpaid Taxes Starts Immediately
The clock doesn’t wait. From the return’s due date, interest starts building—quietly and quickly. It compounds daily, with rates adjusted each quarter. And even during appeals, it never stops. That silent increase is why unpaid taxes can turn small debts into something much harder to escape down the road.
Wage Garnishment Is A Real Possibility
Just imagine expecting a full paycheck and seeing a chunk missing. That’s how IRS wage garnishment can hit. No court is needed—they notify your employer directly. It won’t stop until the full debt is paid off or resolved. Although there are caps, what’s left in your hands might barely stretch far enough.
Your Bank Account Could Be Frozen
A levy from the IRS allows them to freeze your bank account to collect unpaid taxes. There’s a 21-day waiting period before funds are taken. Most banks freeze the full balance immediately. Unless prompt action is taken, the money may be gone permanently, leaving you without access to your own funds.
Tax Liens Can Hurt Your Credit And Property
Staying ahead of tax filings helps avoid legal hits like federal liens. These claims show up on credit reports and drag down loan chances. Worse still, they follow you into future purchases. Once filed, they’re public and easy for landlords or employers to see. Acting early protects what matters most.
You May Face Legal Charges For Tax Evasion
Skipping taxes year after year? That’s not just risky—it’s illegal. The IRS can pursue misdemeanor charges with jail time up to a year per missed return. Larger cases may lead to felony prosecution and steep fines. Even a single referral can damage reputations and derail entire careers.
Social Security Benefits Can Be Garnished
Up to 15% of your Social Security can be taken by the IRS each month, even when it’s your only income. The offset is automatic and often unexpected. Recipients tend to learn the hard way. Surprisingly, the IRS is one of the few federal agencies that can legally garnish Social Security payments.
You’ll Lose Access To Installment Agreements
Installment agreements are off the table unless every required return is filed. The IRS doesn’t negotiate payment plans with incomplete records. Filing early—even if you owe—can make things easier. What’s more, skipping returns today can block access to tax relief options tomorrow. Consistent filing opens more paths than you think.
