Can You Go to Jail for Not Paying Taxes?

Janet Berry-Johnson, Author at LendingTree

Anna-Louise Jackson, Editor at LendingTree

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Many people dread the paperwork that comes with filing a federal income tax return — so much so that they avoid filing their taxes at all. But can you go to jail for not paying taxes?

In some cases, yes — but you won’t face jail time simply for missing a deadline or not being able to pay the taxes you owe.

Below, we’ll look at what constitutes criminal activity in U.S. tax law and discuss strategies to help pay taxes without worrying about spending time behind bars.

Key takeaways

You won’t go to jail for making an honest mistake on your tax return or not being able to pay your tax bill in full.
The IRS only jails taxpayers if they willfully fail to pay the tax they owe or attempt to mislead the government about how much they owe. Penalties for these crimes can result in fines of up to $250,000 and five years in jail, per charge.
If you need help with your tax bill, there are resources available.

What the IRS can send you to jail for

The IRS reserves prosecution for criminal tax fraud for those people who actually commit tax fraud or tax evasion. These are serious criminal offenses, so it’s essential to understand what activities can result in prison sentences if prosecuted by the IRS.

Tax fraud

Tax fraud is an umbrella term encompassing many different tax law violations. When you intentionally fail to pay the federal taxes you owe, you’re defrauding the government of the money it’s owed. Tax fraud can also occur when you knowingly file a false return.

In tax fraud cases, the IRS has to prove that you failed to pay the tax you owed and that the failure was intentional.

Tax evasion

Tax evasion is one crime that falls under the tax fraud umbrella. It involves knowingly and intentionally deceiving the IRS to avoid paying taxes or not paying the full amount of tax you owe.

Some examples of tax evasion include:

Falsifying financial records
Underreporting income
Falsely reporting that income was generated by another person
Ignoring overseas income

Failure to file a tax return

What happens if you don’t file taxes? Failing to file a tax return because you forgot about the deadline, had a death in the family or were dealing with another kind of hardship isn’t considered a criminal offense, but you may have to pay interest and penalties on your unpaid tax bill.

However, the consequences are more serious if the IRS sees any indicators of potential fraud.

Some indicators of fraud include:

A history of not filing taxes
Ignoring IRS notices or failing to cooperate with IRS agents or employees
Attempting to conceal assets
Understating income
Providing incomplete or misleading information to a tax preparer
Failing to maintain adequate documentation
Falsifying documents
Offering inconsistent or implausible explanations for your failure to file

If the IRS finds indicators of fraud, it can escalate the charges to a misdemeanor or felony, which carry steeper penalties.

Felony tax evasion charges can result in up to five years in prison and up to a maximum of $250,000 in fines ($500,000 for corporations).

Helping someone evade their taxes

When you help someone else evade taxes, you become an accessory to their crime. The federal government can hold you responsible and prosecute you, just as if you’d committed the tax crime yourself.

Examples of helping someone evade taxes include:

Falsifying documents on their behalf
Accepting transferred assets to help them to avoid paying taxes
Providing false information to the IRS about their income or expenses

Tax evasion vs. tax avoidance: What’s the difference?

Although the two terms may sound the same, one is legal and the other is not.

Tax avoidance involves using legal methods, such as tax deductions or credits, to lower your overall tax bill. It is not a crime.

Tax evasion, on the other hand, involves using illegal methods to falsify your tax liability or a refusal to pay. It’s punishable by law.

What the IRS can’t send you to jail for

Tax fraud and evasion are serious offenses that can lead to criminal prosecution. However, there are many lesser violations of tax law for which the IRS doesn’t pursue criminal charges.

Tax filing mistakes

Making a mistake on your tax return typically won’t result in criminal charges, but it can still lead to hefty penalties and interest charges. The penalties depend on the nature of the mistake and whether you made the error intentionally or due to negligence.

If the IRS discovers a mistake on your return, it will usually send a notice of deficiency. This notice CP3219N outlines the proposed changes to your return and the amount of tax, penalties and interest you owe.

If you substantially understate your tax liability — by 10% or more of the tax you actually owe or $5,000, whichever is greater — the IRS can assess an Accuracy-Related Penalty. If you did not report all income, this penalty is 20% of the underreported amount of tax that’s attributable to negligence or disregard of rules or regulations. This penalty is on top of interest charges.

Watch out for scams: Make sure the IRS is contacting you

Many scammers try to impersonate IRS officials. Take steps to make sure the IRS is actually contacting you.

The first time the IRS reaches out, it will typically be through U.S. postal mail, not through other methods. You can search the notices and letters database on the IRS website to verify that the correspondence is real.

Being unable to afford to pay your tax bill

If you’re unable to afford to pay your tax bill, that typically doesn’t rise to the level of criminal charges. But the IRS can assess late payment penalties and interest charges.

The penalties and interest assessed depend on the amount of tax you owe and how long it takes for you to pay it off.

If you fail to pay the amount you owe by the filing deadline — usually April 15 — the IRS can charge a Failure to Pay Penalty of 0.5% of the unpaid tax for each month or part of a month that the tax is outstanding. The IRS caps this penalty at 25% of your unpaid taxes. The IRS also charges interest on the unpaid balance and interest on penalties. Interest rates are set by the federal government each quarter; as of Q3 2025, the interest rate on underpayments is 7% for individuals.

Failure to file if you aren’t required to

In certain situations, you might not be required to file a tax return. For example, you may not have to file if your income falls below a certain threshold. The income threshold varies depending on your filing status and age, but for the 2025 filing season, most people must file a return if their gross income is over $14,600 if single and $29,200 if married and filing a joint return.

Check out Table 1 in IRS Publication 501 or use the IRS’s Do I Need to File a Tax Return? interactive tool if you need help determining whether you need to file.

It’s also important to note that if you’re self-employed, you may be required to file a tax return even if your income falls below the above mentioned threshold. Anyone with net earnings from self-employment of at least $400 must file a return and pay self-employment taxes.

What to do if you can’t pay your taxes

If you can’t pay your taxes, there are a few options available that can keep you out of hot water with the IRS.

Be proactive

Contact the IRS right away at 800-829-1040 (or 800-829-4933 if you’re calling about a business return) if you don’t have enough money to pay your taxes or can’t file your return on time.

So long as you’re proactive, the IRS will usually work with you to make arrangements and won’t start aggressive collection efforts.

Government forgiveness programs

The IRS offers several options for people who can’t afford to pay their tax bills in full. An IRS representative or tax professional can help you determine which option is best for you and may even help you apply to the program.

Payment plans: An IRS installment plan allows you to pay off your tax debts over time rather than in one lump sum. A few different types of installment plans are available depending on the amount of tax owed and how quickly you can pay off the balance.
Offer in compromise: An offer in compromise allows you to settle your tax debt for less than the full amount owed. However, this is typically only available to people with limited financial resources or extreme financial hardship. The application process is lengthy and requires submitting detailed financial information to the IRS, so getting help from your tax attorney or accountant is a good idea.
Tax penalty relief: If you missed the deadline for filing your taxes due to circumstances beyond your control — such as a natural disaster, serious illness, the death of an immediate family member or another hardship — the IRS might agree to waive your penalties. You can request penalty relief by calling the IRS or using Form 843. You may need to provide supporting documentation, such as copies of medical bills, insurance documents or proof of job loss.

Use a personal loan

You may be able to use a personal loan to pay your tax debt. When using a personal loan to pay off tax debt, you take out a loan from a bank, credit union or online lender at a fixed interest rate.

A personal loan can be a good option as long as the interest rate is lower than the penalties and interest charged on your tax debt.

Credit counseling

Credit counseling can be a valuable tool for anyone struggling to pay their debts. Credit counselors advise and assist individuals in managing their finances, including creating a budget and negotiating credit card or loan balances.

You can find a list of approved credit counseling agencies on the U.S. Department of Justice’s website.

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