What happens if you don't file taxes in 2025?

Failing to file a tax return when you are required to can result in escalating consequences ranging from financial penalties to criminal charges in extreme cases.

Financial penalties: The failure-to-file penalty is 5% of unpaid taxes per month, capped at 25%. After 60 days past the deadline, the minimum penalty is $510 or 100% of tax owed, whichever is less. Interest accrues on top of penalties at the federal short-term rate plus 3% (currently 7%), compounded daily.

IRS enforcement actions: If you do not file, the IRS may file a Substitute for Return (SFR) on your behalf using information from W-2s and 1099s. This return will not include any deductions, credits, or filing status benefits you might be entitled to, so the tax bill will typically be higher than if you had filed yourself. The IRS can then assess the tax and begin collection.

Collection actions include: Federal tax liens on your property, wage garnishment (the IRS can garnish wages without a court order), bank account levies, passport revocation for seriously delinquent tax debt over $62,000, and seizure of assets in extreme cases.

Criminal prosecution: While rare, willful failure to file is a misdemeanor under IRC Section 7203, punishable by up to 1 year in prison and a $25,000 fine for each year not filed. The IRS typically reserves criminal prosecution for egregious cases involving large amounts of tax or patterns of fraud.

What to do if you are behind: File as soon as possible, even if years late. The IRS Voluntary Disclosure Practice can help avoid criminal prosecution. You may qualify for first-time penalty abatement or an installment agreement.