The consequences of unfiled tax returns have serious ramifications:
1. Failure to file penalties - The IRS will likely assess an excessive penalty (based on a percentage of your total tax burden) for every month you are late on taxes. The cap is 25 percent.
2. Yes, you can be arrested and charged for failing to file your tax returns. You do not want to spend time in prison because you did not file your taxes.
3. Tax Liens and Tax Levy - If you continue to have tax returns that are unfiled, the IRS will do everything it can to recover its money. This will likely include placing a tax lien and ordering a tax levy against your assets, including garnishing your wages, seeing your bank account(s), or seizing real property.