If the government owes you, you'll lose your refund if you don't file within 3 years of the tax filing deadline date.
This means that for tax year 2023 returns, you'll need to file by April 15, 2027, to claim your refund (October 15, 2027, if you filed an extension).
On the other hand, if you owe taxes, you'll be subject to the failure-to-file penalty, which amounts to 5% of your unpaid tax bill for every month your tax bill remains unpaid after the April deadline, up to a maximum of 25%. You will also be subject to the failure-to-pay penalty, which is 0.5% of your unpaid tax, up to an additional maximum of 25% over 50 months. The two penalties are combined for a maximum of 5% for those first 5 months. Then the 0.5% failure-to-pay penalty continues for up to the additional 45 months until you pay the entire tax bill. The IRS will also add interest to any unpaid tax bill, calculated monthly.
In the meantime, the IRS will send you several reminders to file. If ignored, the IRS may then file a substitute return on your behalf. While this may sound like a clever way to hand off your tax-prep chores to the government, keep in mind that government-prepared returns may not grant you every deduction or credit you're entitled to.
Chronic non-filers who owe taxes are subject to additional penalties and, in some cases, criminal prosecution. Delinquent taxpayers who owe more than $25,000 will eventually receive a visit from an IRS representative to collect payment.
