We have all dreamed of simply not filing our taxes with the Internal Revenue Service. Bailing on the paperwork; not having to deal with complicated rules, codes and brackets; just sitting back, relaxing, and not caring about what the IRS thinks about our reluctance to send them information that they already have.
However, such a dream is folly, in the end. As we’re told, there are severe consequences if you fail to file your taxes. But what would actually happen if you didn’t file your taxes? How would the IRS respond?
There are a few steps to this answer. The first is that, initially, the IRS wouldn’t do anything. Failing to file your tax return would get noticed immediately, but the IRS has so many priorities and backlog tasks that the chance that your failed return would prompt immediate action is close to zero. Still, you would get flagged by the IRS, and in a few years time, they will be all over you.
They probably won’t send you to jail — after all, that would mean you couldn’t work and the government couldn’t get the money it is owed. But you would get tied up in a lot of paperwork and your assets could be seized. What’s worse is that once they audit you, the penalties and fees associated with your disregard for filing your taxes will mount to an absurd level — way more than you would have initially had to pay if you had just filed in the first place.
In other words, it is best for you to just deal with the tax filing — whether you owe or are due a refund — to avoid this tax mess.
Source: Bloomberg, “This Is What Happens When You Just Donât File Your Taxes,” Benjamin Steverman, Feb. 3, 2015
