The consequences for not filing federal income tax returns can be severe. Firstly, the IRS may impose penalties for failure to file, which can range from 5% to 25% of the unpaid taxes owed, depending on how late the return is filed.
Moreover, if the failure to file is combined with a failure to pay taxes owed, additional penalties and interest will accrue on the outstanding balance.
The IRS also has the power to levy bank accounts, garnish wages, and seize property to collect unpaid taxes.
In extreme cases, failure to file federal income tax returns could result in criminal charges being filed against the noncompliant taxpayer. Criminal charges could lead to imprisonment, fines, and restitution payments.
Therefore, it is essential to file tax returns on time each year, even if unable to pay the taxes owed. Late filing is preferable to not filing at all, and it is always advisable to seek professional tax advice to ensure compliance.
If you are facing issues with non-filing or non-payment of taxes, it is recommended that you seek the advice of a qualified tax attorney, who can review your specific circumstances, and provide guidance on the best course of action to remedy the situation.
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