When you think about it, the tax system here in the United States is really based on the honor system. The federal government trusts that you will honor your responsibility to file your tax forms to the Internal Revenue Service for processing. Of course, you truly are legally required to file them — but even if you didn’t file, some time would pass before any penalties would be inflicted upon you.
This isn’t to say that you should decide to just skip your duties as a U.S. citizen and not file your taxes. Far from it, actually. But it is an interesting realization about our current tax system. While we’re on the topic, though, it begs the question: what happens to someone if they simply don’t file their taxes?
Before we can answer that, it is important to realize that taxes may not get filed for a variety of different reasons. Confusion over rules and regulations; forgetfulness; willful negligence; legal complications; all of these factors could lead to someone not filing their taxes. But if you willfully neglect your tax filing or file something fraudulent (i.e. if you have intent to not file in a timely or accurate manner) then the IRS is far more likely to pursue aggressive legal action — and it likely will include criminal charges.
If you are forthcoming about your mistakes after failing to file, then the IRS is far more likely to work with you and reach some sort of agreement or compromise. You may still be penalized as a result of your inability to file, but the IRS will be far more inclined to give you the benefit of the doubt if you are honest and forthcoming about your mistake (or inability to file).
Source: FindLaw, “What to Expect If You Don’t Pay Your Taxes,” Accessed Dec. 5, 2015