What happens if I don't file my tax return?

Taxes, Schmaxes

Excerpts:

What happens if you get tired of waiting and decide not to file your taxes at all?

Probably nothing. If you're self-employed without any major assets or loans, the odds of getting busted are extremely low. In fact, an estimated 7 million Americans fail to file their taxes every year, and in 2008 the IRS examined only 158,000 such cases. That comes out to a roughly 2 percent chance of getting caught. Even if the IRS does audit you, the agency probably won't press charges. Instead, they'll just file a tax return for you and charge you a fee for the trouble.

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Tax evasion can catch up with you if you take out a mortgage for a house (since tax statements are usually necessary) or if you take a government job, like, say, treasury secretary (since the IRS automatically audits all incoming employees). Evasion is also a bad idea if you have enemies: The IRS often snags evaders when embittered spouses or fired employees rat out their former lovers or bosses.

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There's a difference between paying taxes for a few years, then stopping, and never paying them at all. The IRS keeps records, so it knows if you suddenly stop filing. You'd probably have more luck sailing under the radar if you start cheating from the get-go. But, again, that'll work only if you're self-employed—or, better yet, unemployed.

You should also keep in mind that the IRS can bust you down the line. Yes, there's a statute of limitations for criminal penalties: After six years, you can't go to jail for not paying taxes. But if the IRS ever discovers that you didn't file your taxes in 2008, they can still force you to pay civil penalties.

Comment: It would be a very bad idea to not file! Another article below

What Happens If You Don’t File Your Tax Return?

Excerpt:

Penalties may be categorized as failure to file or failure to pay penalties which will automatically assessed by the IRS, and as an underpayment that are related to some negligence or intentional fault of the tax payer.

The failure to file or (FTF) penalty is assessed by the IRS at a rate of 5% per month or partial month up to a 25% maximum. The failure to pay (FTP) penalty is assessed by the IRS at a rate of 0.5% per month or partial month up to a 25% maximum. If both the FTF and FTP penalties are assessed, the FTF penalty is reduced by the FTP penalty.