Behind on your taxes? Here’s what the IRS can do if you don’t file or pay
The federal tax deadline is April 15, and that date is coming up fast for anyone who hasn’t filed yet.
Missing the deadline or falling behind on back taxes can lead to penalties, interest, and notices from the IRS. Many Texans don’t realize what actually happens when a return isn’t filed or a tax bill goes unpaid. If you’re unsure how the rules work or what steps to take, you still have time to get ahead of it.
Here’s what to know.
What happens if I don’t file my taxes?
The IRS charges a failure to file penalty for anyone who skips a required federal return.
The agency says this penalty usually grows by five percent of the unpaid taxes for each month the return is missing, up to 25 percent of the total.
Interest also starts the day after the deadline and keeps building until your return is submitted, and the balance is paid.
If you go long enough without filing, the IRS may create a substitute return. This version doesn’t include any credits or deductions you may qualify for, which can make the bill higher than it should be.
Filing your actual return replaces that version and can reduce how much you owe.
What happens if I don’t respond to the IRS about unpaid taxes?
If the IRS doesn’t hear from you after a deadline has passed, it starts sending notices explaining what it needs and what will happen next.
Ignoring those letters can lead to stronger collection actions, especially once the agency has documented multiple attempts to reach you.
One of the first steps the IRS may take is redirecting any future federal tax refunds to help pay down your balance.
If the debt continues to sit without a response, the agency can move to garnish wages or freeze funds in your bank account.
In more serious cases, the IRS can also place a federal lien on your property, which signals to creditors that the government has a legal claim to the assets you own.
Continued silence can also affect your ability to renew a passport or challenge what you owe, since the IRS can limit appeal rights when notices go unanswered for too long.
Experts at TurboTax recommend responding to these letters as soon as you receive them. That can be as simple as calling the phone number listed on the notice to talk through your options or set up a payment plan.
What happens if I already owe back taxes from previous years?
Back taxes grow more costly the longer they sit unpaid.
Interest and penalties continue to build every month, and over time the IRS can move an older balance into its collections system, which means more notices, and fewer opportunities to resolve the issue quietly.
When a tax debt has been outstanding for years, the IRS may review your financial situation to decide what collection steps make sense. That can include monthly payment plans based on what you can realistically afford.
For people facing financial hardship, the IRS may temporarily pause collection through what it calls Currently Not Collectible status. This doesn’t erase the debt, but it stops wage garnishment and other enforcement until your situation improves.
Some taxpayers may also qualify for an Offer in Compromise. This lets the IRS settle the debt for less than the full amount owed, but approval requires proving that paying the full balance would create a financial burden.
The IRS looks closely at your income, expenses, assets, and overall ability to pay before granting this option.
What options do I have if I need more time to file?
The IRS allows you to request an extension until Oct. 15 if you can’t finish your paperwork by the April deadline.
An approved extension gives you more time to file your return, but it doesn’t push back the April 15 payment deadline. Any amount you owe is still due in April, and interest continues to build on unpaid balances.
The agency lists three ways to request an extension. One option is to pay your estimated tax bill online and check the box that says your payment is for an extension.
The IRS treats that payment as your extension request, and you’ll receive a confirmation number for your records.
You can also request an extension through IRS Free File, which doesn’t have an income limit for extension requests. The system lets you electronically submit the extension form without paying a fee.
Another option is mailing in Form 4868. This form can be submitted by mail, filed online with an IRS e-file partner, or completed by a tax professional.
You will need to estimate how much tax you owe for the year on the extension form, including any payments you already made toward your 2025 tax bill.
