Income Tax

• One reason that you might find yourself facing penalties for not paying your federal taxes is believing filing a tax return is voluntary. The Internal Revenue Service explains that "voluntary" means you have the option of figuring out how much tax you owe and filling out the forms properly, as opposed to having the government tell you how much you owe. Failing to pay the federal taxes you owe can result in federal fines, imprisonment, as well as civil prosecution.
  
  

Employment Taxes

• In addition to penalties for not paying income taxes, there are penalties for not paying other federal taxes, such as employment taxes. If an employer withholds federal taxes from his employees and fails to pay those taxes to the government, he can face criminal prosecution, resulting in imprisonment, as well as having to pay restitution and additional fines and penalties.
  
  

Tax Lien

• If you do not pay your federal taxes, the government can file a tax lien on your property. This means the government has a claim on all your property, including your house. It also means the government has a claim on any property purchased after the lien is granted. Additionally, if you are a business, the tax lien can be applied to any accounts owing you money, allowing the government to take what it is owed. Having a tax lien filed by the government can impact your credit history, bringing your credit score down. Unlike other items on your credit report, a federal tax lien has no expiration date.
  
  

Consequences

• If found guilty of tax evasion, which includes failing to pay federal taxes, you can be fined up to $100,000 and go to jail for up to five years. If you decide to skip filing a tax return, you could face up to a year in prison, as well as much as $25,000 a year for each year the return wasn't filed. You can also have your bank accounts frozen, preventing you from having access to any of your money.