Not Filing or Paying Your Taxes at All
Of course, the riskiest of all tax moves is to completely ignore the IRS and fail to file or pay your taxes at all. You've heard that people get away with it all the time. What's the worst that could happen?
Likely consequence: Er, people don't get away with it all the time. Remember Wesley Snipes? He reported to a federal prison in December for a three-year sentence for not filing several years' worth of returns.
While criminal prosecution is a real possibility for choosing not to file and pay your taxes, it's not the only consequence. Even if the IRS decides not to file criminal charges, the IRS can impose significant underpayment penalties and interest on taxes you never sent in — and then take serious steps to collect. Collection activities could include the filing of a federal tax lien, raiding bank accounts, seizing assets or levying wages.