Didn't file your taxes on time? Here's what will happen to you

I am one of the world's leading procrastinators. Last night I finished and hit "transmit" on my E-filed taxes at exactly 11:59 p.m. I had planned to do my taxes in February, of course, and then... all of the sudden it was April 15th, and it was nearly midnight. What some people do for an adrenaline rush, hmmm?

But in previous years I've done far worse. Last year I managed to get my Federal taxes to the post office by 11:56 p.m. on tax day... my Federal taxes for 2005. It wasn't until a few days later that I finished my Federal and state taxes for 2006, and my state taxes for 2005. So I know exactly what happens to a person who doesn't file her (or his) taxes on time.

Did you miss the deadline? Did you forget to file an extension, or just not get around to it? Are you, too, a tax delinquent? Firstly: take a deep breath. No one is going to throw you in prison for sending in your taxes a few days late. They won't even call or write, not for several months (and, if you haven't filed in previous years, they could never call or write, depending on whether or not you have had income reported to government agencies). If you manage to get them in a reasonable time frame (less than six months), you'll just be paying a small penalty and interest (if you owe taxes), as much as 4.5% and more if your taxes are more than 60 days late (at least $100, or a penalty equal to the whole amount you owe, whichever is smaller).

What if you're owed a refund?While it will be in your best interest to get your taxes in on April 15 (especially if you're due a rebate in the Economic Stimulus Plan -- if you haven't filed by the end of the week, chances are you won't get one at all), there is no need to fret. You could go several years without penalty, in fact, and if the IRS chooses, you could be paid interest on your refund when you do file (though they're only obligated to pay interest if the refund is delayed by some fault of the agency's).

If you're paying ridiculously late (as *cough* someone I know did in 2004, self-employed and badly underestimating her tax liability), the IRS will start asking you for money a few months after you file. You'll be given a chance to set up payment plans before they go to the extreme measure of attaching assets. If you owe back taxes, for instance, they'll be taken out of your Stimulus Package check.

What if you never file, even though you owe taxes? I haven't personally been in this situation, and many states are more eager to collect their money than the IRS is (or maybe they just have more staff). If you owe back taxes, you're more likely to be flagged than if you never have filed. And you can go to jail for failing to file taxes when you owe money, though the IRS is friendly to those who file "voluntarily" even if they can't pay right away.