This is what happens when you just don’t file your taxes

You do enter paperwork purgatory

When the IRS systems figures out you owed money, it automatically generates a tax return for every year you failed to file. It then sends you a bill; if you don’t respond quickly, it begins the process of seizing your assets. But the IRS’s returns probably won’t include all the deductions you’re entitled to, which means that many people need to re-file all their missing returns, digging up years-old documents to prove their case. Complex tax issues can take more than a year to resolve, says Jerry Love, an accountant and financial planner in Abilene, Texas, and that’s assuming you respond quickly to all IRS requests for more information. If you miss a deadline, you lose your spot in line and need to start all over.

You’ll owe so much more than you thought 

If you owe the government money, you’ll have to pay it, plus interest and fines. If you owe money and don’t file, the IRS charges a penalty of up to 25 percent of what you owe, and can charge another 25 percent for failing to pay your bill on time. A 75 percent penalty is reserved for egregiously fraudulent returns, IRS guidelines say. There’s also interest, currently compounding at 3 percent per year. 

Eventually, the government will get paid 

Once the returns are in, there are essentially three ways to get the IRS to go away: Pay your taxes immediately, pay them through an installment plan, or somehow get the IRS to cut your bill. Declaring bankruptcy can get rid of some, but not all, tax debts, and IRS guidelines are designed to get you to pay as much as you possibly can.