If you didn't pay your taxes on time, interest and penalties begin to accrue immediately. If you go long enough or owe enough money, the IRS can garnish your wages, place a lien on your property or even revoke your passport.
A tax extension allows you to avoid some penalties for filing a late return, but it doesn't change when payment is due.
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What happens if you don't file a tax return?
Even if you can't pay your tax bill, you should still submit a return: The Failure to File penalty is 5% of the unpaid taxes for each month your return is late, with a maximum of 25% of your unpaid taxes
One of the easiest and fastest ways to file is with a tax-filing software program like TurboTax or H&R Block.
TurboTax
Free version
If you have a simple Form 1040 return only (no forms or schedules except as needed to claim the Earned Income Tax Credit, Child Tax Credit, student loan interest, and Schedule 1-A), you can file for free yourself with TurboTax Free Edition, or you can file with TurboTax Expert Assist Basic at the listed price. Roughly 37% of taxpayers are eligible.
Guarantee
Guarantees 100% accuracy and maximum refund
Live support
Expert Assist plan includes unlimited assistance and final review. Expert Full Service includes a dedicated expert to complete and file your return.
Tax refund advance loan
Yes
Read our review of TurboTax tax software.
H&R Block
Free version
Yes
Guarantee
Guarantees 100% accuracy and maximum refund
Live support
Live chat available with all paid plans
Tax refund advance loan
Yes
Read our H&R Block tax software review
What happens if you don't pay your taxes?
If you do not submit a return, you risk losing any refund you're owed. The consequences can be much more severe if you owe money.
Penalties and fees
The interest rate for overdue taxes is determined by adding 3% to the federal short-term interest rate, which the government adjusts every three months. The short-term rate is 4% for both the first and second quarters of 2025, so interest on unpaid taxes is 7%.
You may also be hit with a failure-to-pay penalty of 0.5% per month. (If it's your first time or you demonstrate a "reasonable cause" for missing payment, the IRS may waive this charge.) As with the failure-to-file penalty, the maximum is 25% of the balance due.
If both a failure-to-pay and a failure-to-file penalty are being applied, the IRS will reduce the former by the latter. Instead of a 5% failure-to-file penalty, for example, you would be charged a 4.5% failure-to-file penalty and a 0.5% failure-to-pay penalty.
The combined maximum for both penalties is 47.5% (25% late payment and 22.5% late filing) of the tax due.
There is also a minimum penalty for late filing if your return is over 60 days overdue: Either 100% of the tax owed or $510, whichever is less. That's why filing a return is important, even if you don't include full payment.
Levies and liens
Within a few months, you can expect letters from the IRS indicating how much you owe, followed by collection notices or phone calls.
If you owe $10,000 or more, the IRS may place a lien on your home, which will appear on your credit report and limit your ability to get credit, including mortgage refinancing. If you sell your house, the IRS has the right to claim all or a portion or the proceeds to recover what is owed.
Even declaring bankruptcy may not remove a tax lien.
Eventually, you may receive a Notice of Intent to Levy, which indicates the IRS is prepared to seize your assets, including your home, car, bank accounts or even a portion of your paycheck.
After the Notice of Intent, you have 30 days to pay your balance, settle or appeal before further action is taken. If you don't pay within 10 days of receiving the notice, the failure-to-pay penalty increases to 1% per month.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Anthem Tax Services is licensed in all 50 states and requires clients to have $10,000 in tax debt to enroll. It advertises a money-back guarantee if it doesn't save you money or rework your payment schedule.
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Other consequences
Eventually, the State Department may refuse to issue or renew your passport. If you have a seriously delinquent tax debt ($62,000 or more), your passport may even be revoked.
The IRS has ten years to collect unpaid taxes. While tax evasion and tax fraud are jailable offenses, you won't go to prison for not having enough money to cover your tax bill.
What if I can't afford to pay my taxes?
If you're concerned your tax bill may be too steep, you can arrange an installment plan with the IRS, but it will include interest and a non-payment penalty of up to 25%.
You can also apply for an offer in compromise (OIC), a request for the IRS to settle your tax bill for less than the amount that you owe. The IRS will consider your income, expenses, any hardship and other factors, but only about a third of OICs are accepted.
FAQs
How long will an unpaid tax debt stay on my record?
The IRS generally has 10 years from when your taxes were assessed to collect payment and any penalties or interest. Once paid off, a tax lien will stay on your credit report for seven years. If it's unpaid, however, it can remain for as long as 15 years.
What happens if I don't pay my taxes?
Unless you can demonstrate a reasonable cause, you'll be hit with a 0.5% fee for each full or partial month after the April due date, up to a max of 25% of your debt. If you continue to ignore requests for payment, you may have your wages garnished, your car or home seized or even your passport revoked.
When are taxes due with an extension?
The deadline to file a tax extension is April 15, 2026. The IRS will give you until Oct. 15, 2026, to file your completed return, but an estimated payment is still required by Tax Day.
Can you go to jail for not paying taxes?
Tax fraud and tax evasion are jailable offenses involving intentionally misrepresenting income or deductions. However, you won't go to prison for not having enough money to cover your tax bill.
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