What penalties can occur for failing to file a tax return?

Failing to file a tax return can lead to various serious consequences, primarily in the form of potential fines, interest, and even criminal charges. The Internal Revenue Service (IRS) imposes penalties for not filing a tax return by the due date, which can accumulate over time, particularly if the taxpayer continues to avoid filing.

The failure-to-file penalty is generally calculated as a percentage of the unpaid tax and can increase if the return is not filed for several months. In addition to fines, taxpayers may also face interest on any unpaid tax liabilities, which compounds the amount owed over time.

Moreover, in extreme cases, persistent non-filing can lead to criminal charges, especially if the behavior is deemed willful tax evasion. This could result in significant legal consequences including incarceration.

In contrast, the other options like a taxable income increase, loss of government benefits, or exclusion from financial aid do not directly apply as penalties specifically tied to the failure to file a tax return. Each of these may have their own consequences under different circumstances, but they are not the primary penalties enforced by the IRS for failing to meet tax filing requirements. Thus, focusing on fines, interest, and criminal charges provides a clear view of the direct repercussions a taxpayer might encounter when