What can happen if a taxpayer does not file their return on time?

If a taxpayer does not file their return on time, they incur a penalty for each month the return is late. The IRS imposes these penalties to encourage timely filing and compliance with tax laws. The penalty typically amounts to a percentage of the taxes owed, increasing for each month the return remains unfiled. This structured penalty system serves as a strong incentive for taxpayers to file on time and fulfill their tax obligations.

The option regarding automatic extensions is misleading because while the IRS does allow extensions for filing, these must be requested before the original due date, and simply not filing leads to penalties. Additionally, the idea that a taxpayer can refile without penalty at any time does not align with IRS regulations, as penalties are specifically tied to not filing. Lastly, claiming that a taxpayer may not owe any penalties for late filing is inaccurate, as penalties are standard practice unless specific exemptions apply, which are rare.