If you don't file your taxes, several consequences can occur, varying in severity depending on whether you owe taxes or not. If you owe taxes, you'll face penalties for both failure to file and failure to pay, plus interest on the unpaid amount. The failure-to-file penalty is 5% of your unpaid taxes monthly, up to 25%, and the failure-to-pay penalty is 0.5% per month, also up to 25%. Interest accrues daily on unpaid taxes and penalties. If you file more than 60 days late, the minimum penalty is $435 or 100% of the tax owed, whichever is less. The IRS can take strong actions, including filing a federal tax lien on your property, garnishing wages, freezing bank accounts, and even seizing assets like a 401(k). In extreme cases involving willful tax evasion or fraud, criminal charges can lead to jail time of up to five years. Additionally, if you don't file at all, the IRS may file a substitute return on your behalf using their own estimates, which could be less favorable than if you filed yourself. Even if you don't owe taxes, failing to file can cause you to lose refunds or tax credits and make it harder to get loans since lenders often require tax returns for income verification. Over time, failure to address unfiled returns can escalate to harsher penalties and collection actions such as wage garnishment or tax liens. Overall, not filing taxes can lead to costly penalties, interest, loss of refunds, legal risks, and significant financial consequences. It is important to file returns on time or work with the IRS to resolve any issues to avoid these outcomes.