In some cases, not filing tax returns can lead to serious consequences—including the possibility of jail time. How likely is it that you’ll actually be sent to prison just for failing to file? This depends on your situation and, largely, your intentions. You need an experienced NY tax lawyer protecting you and minimizing the penalties you face for unfiled returns.
Is Jail Time Really Possible for Not Filing Tax Returns?
It is possible to go to jail for not filing tax returns, but it’s rare. Imprisonment usually happens in cases where the government can prove you willfully ignored or hid your tax obligations over a long period. If you simply forgot to file a return one year or made an honest mistake, the chances of going to jail are low.
Generally speaking, the government would rather receive money than put taxpayers behind bars. Most cases of not filing tax returns lead to civil penalties—like fines and interest—rather than criminal charges. However, if the IRS or state tax authorities believe you tried to cheat on your taxes, lied about how much you owed, or refused to cooperate for years, they might look into criminal charges.
Federal (IRS) Penalties for Late Filing
The IRS usually charges 5% of your unpaid taxes for each month (or part of a month) that your return is late, up to a total of 25%.
If your return is over 60 days late, you’ll face a minimum penalty. This minimum is set by specific dates. For returns due in 2023, the minimum penalty is $450 or 100% of the underpayment (whichever is less). For returns due after 2023, the minimum penalty rises to $485.
Failure to File AND Failure to Pay
If you owe both a Failure to File and a Failure to Pay penalty in the same month, the IRS cuts the Failure to File penalty by the Failure to Pay penalty. That way, the combined penalty for each month that your return is late does not exceed 5%.
After five months, the Failure to File penalty maxes out (reaching 25% of the unpaid tax), but the Failure to Pay penalty keeps growing until you pay, up to its own 25% limit.
Interest on Penalties
The IRS charges interest on any unpaid tax and on the penalties themselves. Interest typically compounds daily, which means the amount you owe will keep increasing until you pay the balance in full.
How You Know You Owe
The IRS will send you a notice or letter if you owe a Failure to File penalty. The letter explains the amount you owe and why. If you receive a notice, it’s important to read and respond quickly to avoid further penalties.
New York State Penalties and Interest
New York has similar rules, although the exact dollar amounts and percentages can vary:
Penalty for Late Filing
Generally, New York charges 5% of the tax due for each month (or part of a month) the return is late, up to 25%.
If your return is more than 60 days late, your minimum penalty is $100 or the total amount due on the return—whichever is less.
Interest Charges
New York also charges interest on any unpaid tax from the date the tax was originally due, even if you received a filing extension.
Like the IRS, New York compounds interest daily, and the rate adjusts quarterly. This extra interest can add up quickly the longer you wait to file and pay.
What If You Can’t Pay the Taxes You Owe?
One important thing to know is that not being able to pay your taxes in full is different from willfully avoiding them. If you file your return on time but can’t pay right away, the IRS typically won’t send you to jail. Instead, they might charge you interest and penalties while offering payment options, such as installment agreements.
In fact, the IRS often works with taxpayers who are in a tough financial spot. Filing your return shows you’re following the rules, even if the money is not currently available. By communicating openly, you can often find a manageable plan to deal with your tax debt.
How Does “Willful” Failure to File Differ From Negligence?
“Willful” means you knew you had a responsibility to file a tax return, but you chose not to do so. If you accidentally missed the deadline but fixed the mistake quickly, that’s usually considered negligence or an oversight, not willful evasion.
Criminal tax cases arise when there’s clear evidence you intended to break the law. For example, if you refused to file returns for multiple years, lied about your income, or hid money in someone else’s name, it’s easier for the government to argue that your actions were willful.
Could You Face Criminal Charges for Multiple Years of Not Filing?
Yes. Failing to file returns for multiple years raises a red flag for the IRS and state agencies. The longer you go without filing, the more it looks like you’re intentionally avoiding your tax responsibilities. Repeated failure to file can move your case from being a civil issue to a criminal one, especially if large amounts of tax are owed.
That said, criminal charges for not filing returns are still not very common. The IRS often tries to contact you through letters, phone calls, or even in-person visits before sending your case to their criminal investigation unit. But if you continue to ignore their attempts to get in touch, the odds of facing serious consequences go up.
How Is Jail Time Determined If You’re Found Guilty?
If you are found guilty of a tax crime, the length of any jail sentence can vary. Courts look at how serious the offense was, how much money is owed, and whether you have a history of not filing or paying taxes. The judge will also consider your willingness to fix the problem.
For example, a first-time offender who owes a modest sum and files late after being warned might get probation instead of jail time. But someone with multiple years of unfiled returns involving large sums of money, combined with attempts to hide assets, could face a lengthy prison sentence.
What Should You Do If You Haven’t Filed Past Tax Returns?
The best move is usually to file those missing returns as soon as possible. Even if you cannot pay the full amount, filing shows you’re trying to correct the situation. By doing this, you might avoid some penalties and show good faith to the IRS or the New York State tax authorities.
If you have multiple unfiled returns or owe a significant amount of money, consider working with a New York tax attorney. They can help you figure out the best path forward, negotiate with the authorities, and lower your chances of facing criminal charges.
Ready to Resolve Your Unfiled Tax Return Issues?
Not filing your tax returns can lead to significant penalties, interest, and in extreme cases, the possibility of jail time. However, it’s never too late to start making things right. At Thorgood Law Firm in New York, our experienced attorneys are here to help you file overdue returns, negotiate payment agreements, and reduce your legal risks.
Don’t let unfiled returns hang over your head any longer. Contact Thorgood Law Firm today online or at (212) 490-0704 to schedule a consultation with a New York tax attorney. We’ve been resolving tough IRS and New York State tax problems for more than 25 years—and we’re ready to guide you toward a confident financial future.
