Tax Day is Monday, April 15th.  For one reason or another some of us wait until the last minute to file.  According to the IRS, over 20 percent of Americans wait until the last two weeks before the deadline to file their tax returns.  No the IRS will not show up to your home if you do not file your taxes on time.  But several situations can happen that may cause you more than a headache.

If you do not file by tax day

  • Pay a penalty and interest fees

Common penalties include failure to file, failure to pay, failure to pay proper estimated tax and dishonored check.  A failure to pay penalty is 5% of unpaid tax required to be reported and charged each month the return is late.  Pay interest on unpaid taxes from due date of the return until payment received in full.  The interest rate is determined quarterly, by the federal short-term rate anywhere from 1% – 4% plus 3%.

  • Receive notices from the IRS

You might here from others that they are getting emails or phone calls from the IRS.  But the IRS will never do that rather contact you via regular U.S. mail before taking any action.

  • Receive a federal tax lien

If you do not file and owe taxes the IRS will send you a bill for amount owed.  Receiving a bill starts the collection process, which will continue until balance is paid in full.  A federal tax lien can be placed on your property notifying creditors that the IRS has a claim against all of your property.  The lien will not be released by the IRS until the tax, penalty, interest and recording fees are paid in full.

  • Serve jail time

Jail time for most can be a possibility if the IRS deems you failed to file or did so fraudulently.  In the event jail time becomes an issue, it could be because a lot of income was hidden or a pattern of wrongdoing exists.

If you have neglected to file or pay the best thing you can do is reach out to the IRS immediately.  The IRS may be more willing to help if you contact them rather than you ignoring their notices.