If you don't pay your taxes by the filing deadline, it may mean paying even more money to the IRS in the form of penalties and interest. Here are some consequences of not paying taxes (on time or at all) and how quickly the IRS will act.
What happens if you don't pay taxes on time?
The failure-to-pay penalty
If you don't pay your tax bill in full by Tax Day, the IRS will charge interest on the outstanding amount. The IRS may also levy a late-payment penalty (sometimes called a failure-to-pay penalty) of 0.5% per month, with a maximum penalty of 25% of your unpaid taxes.
» Learn more: How much interest does the IRS charge on late taxes?
Notices start to arrive within 1-3 months
If you're issued a failure-to-pay penalty, the IRS will send you a letter about your outstanding balance. You may receive more than one letter. The agency says if you can prove a reasonable cause for paying late or if this is your first offense, you may be able to get the penalty reduced or removed.
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
AD
Owing the IRS Over $10K Is More Common Than You ThinkDiscover tax resolution options customized to your case, backed by a 100% Resolution Money Back Guarantee.
on TaxRise's website
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
AD
Owe $10,000+ in IRS Back Taxes? Get Trusted Tax Help TodayBBB Accredited, $500M+ tax debt resolved, free consultation.
on Alleviate Tax's website
Tax liens and collections calls may follow
If you take no action to respond to the notice(s) or make a payment, the IRS may ramp up its collection tactics.
- A tax lien is a legal claim against property and financial assets you own or may have coming to you. It’s not a seizure of your assets, but it is a claim on them. If you sell the asset, the government could be entitled to some or all of the proceeds.
- Liens are often public records. That means that even if they're not on your credit report, liens could affect your ability to get loans, get a job or keep a security clearance. Filing for bankruptcy may not necessarily get rid of the lien or your tax bill.
- The IRS may send your account to a private collection agency. The IRS will send you a notice should that happen, and it will give you the collection agency’s contact information.
IRS levies and passport restrictions
Continuing to ignore notices and not taking steps to repay your tax debt could lead to more serious consequences, such as a tax levy or passport seizure, within a few months' time.
- A tax levy is the actual seizure of your assets — property, bank accounts, Social Security payments or even your paycheck — to pay your debt.
- The IRS can levy, seize and sell any type of personal property that you own or have an interest in, such as your car or real estate, and apply that money to your unpaid tax bill.
- Ten days after a notice of intent to seize or levy is issued, the late-payment penalty rises to 1% per month. On top of all that, the State Department may not issue or renew your passport, and it might even revoke it if your accrued federal tax debt is over $64,000 ($66,000 for the 2026 tax year).
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
AD
Owing the IRS Over $10K Is More Common Than You ThinkDiscover tax resolution options customized to your case, backed by a 100% Resolution Money Back Guarantee.
on TaxRise's website
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
AD
Owe $10,000+ in IRS Back Taxes? Get Trusted Tax Help TodayBBB Accredited, $500M+ tax debt resolved, free consultation.
on Alleviate Tax's website
What to do if you can't pay your taxes
If you can't afford to pay your full tax bill, the IRS recommends you pay what you can as soon as possible.
The agency also offers tax payment plans that could help you pay off your debt. Enrolling in one shows you’re making an effort, can lower your late-payment penalty to 0.25% per month, and could help ward off levies.
Another relief option is an offer in compromise. This IRS program allows taxpayers to settle their debt for less than the original amount owed. You can apply for it on your own, but note that the IRS typically accepts fewer than half of the applications.
To try to keep the problem from happening again next year, review your W-4 form to make sure you’re having enough tax withheld from your paychecks during the year to cover your expected tax bill.
» MORE: 5 ways to deal with tax debt
Explore more on
Article sources
NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.
- 1.Internal Revenue Service. Failure to Pay Penalty. Accessed Jan 21, 2026.
- 2.Internal Revenue Service. Penalty Relief. Accessed Jan 21, 2026.
- 3.Internal Revenue Service. Understanding a Federal Tax Lien. Accessed Jan 21, 2026.
- 4.Internal Revenue Service. Private Debt Collection. Accessed Jan 21, 2026.
- 5.Internal Revenue Service. What Is a Levy?. Accessed Jan 21, 2026.
- 6.Internal Revenue Service. Will I Be Charged Interest And Penalties For Filing And Paying My Taxes Late?. Accessed Jan 21, 2026.
- 7.Internal Revenue Service. Revocation or Denial of Passport in Cases of Certain Unpaid Taxes. Accessed Sep 16, 2024.
- 8.Internal Revenue Service. 2022 Internal Revenue Service Data Book. Accessed Sep 16, 2024.
