There may be debate as to the benefits of the policy proposals from President Trump, but there’s no dispute that he’s bringing change to Washington. He recently signed an executive order abolishing the U.S. Department of Education, and there’s no reason to think his efforts to leave his mark on the country will end there.

For example, significant layoffs are expected soon at the IRS, which further compounds the effect of reduced IRS funding. Combined with anti-IRS rhetoric in Washington and beyond, it’s understandable that many people are thinking that if there was ever a time to cheat on their taxes or ignore an unpaid tax bill, it’s now.

But before you start planning how to take advantage of the IRS, you need to know that just because it might be harder for the IRS to collect taxes or process returns, that doesn’t change your obligation to file or pay, despite what talking heads on television or social media say. Trying to take advantage of the misinformation and confusion could end up costing you more than just a bigger tax bill.

Key Takeaways

  • 2025 tax laws – Despite what you might hear from others, you’re still required to file tax returns and pay your taxes to the IRS.
  • Potential changes to the tax code – The Trump Administration is indeed bringing about many changes to Washington, but none of those have changed the IRS’s mandate to process tax returns and collect unpaid taxes.
  • Current requirements – For the moment, don’t expect major changes that eliminate your tax obligations.
  • Consequences of not paying or filing – If you ignore your tax filing or payment obligations, you can expect civil and even criminal penalties.
  • How to get help – if you have trouble filing your tax returns or paying your taxes, tax help is available.

As of 2025, You’re Still Required to File and Pay Your Taxes

As of the time of this writing, the legal obligation to pay federal income tax remains. There have been no changes to the Internal Revenue Code (IRC), case law, or applicable regulations that remove this requirement. Despite what some people might claim online, no single individual (including the President of the United States) can arbitrarily alter your obligation to pay taxes.

It’s true that President Trump and Congress could make changes to the IRS and the regulations it enforces, and that could affect how you pay your taxes or what happens if you don’t. But such changes would take time to work their way through the administrative system in Washington. Right now, as of the 2025 April tax deadline, there are no major changes in IRS operations as they relate to tax collections or tax processing responsibilities.

When You Don’t Have to File Your Taxes

Not everyone is required to pay federal income taxes, although these exemptions have been around for a while and aren’t new. Generally speaking, you don’t have to pay federal income tax if:

  • Your income is below the standard deduction;
  • You work overseas and don’t exceed certain income thresholds; or
  • You’re an eligible non-profit organization.

There are two things to note about this list. First, tax laws can change each year, so even if you didn’t have to pay taxes one year, that doesn’t automatically mean you don’t have to pay taxes the next year (even if your financial situation doesn’t change).

Second, the more important question isn’t whether you have to pay taxes. Instead, it’s whether you’re legally obligated to file a tax return with the IRS.

This is the more important question to ask because you might be missing out on certain tax benefits, such as a tax refund or credit, like the Earned Income Tax Credit. Filing a tax return also starts the Assessment Statute Expiration Date (ASED). This is a deadline of three years for the IRS to assess a tax against you and this “clock” doesn’t begin until you file a tax return. Finally, not filing a tax return when you’re supposed to can also result in penalties.

When You’re Required to File Your Taxes with the IRS

You should expect to file if you’re a U.S citizen or permanent resident who worked in the United States and:

  • Your income exceeds the applicable standard deduction;
  • You have more than $400 in self-employment earnings; or
  • Another situation discussed in IRS Publication 501, Dependents, Standard Deduction, and Filing Information requires you to file.

Sometimes, your age can become a deciding factor if combined with your income level. Usually, this age threshold is 65. Whether someone else claims you as a dependent can also affect your filing obligation.

What Happens If You Don’t Pay or File Your Taxes?

If you’re required to file a tax return and/or pay federal taxes but you don’t, you’re facing the possibility of significant trouble. Most taxpayers will face civil penalties, but criminal penalties are also possible.

Civil Penalties

The best-case scenario is that you’re negligent in your failure to comply with these obligations. Maybe you should have done more research or consulted with a tax professional, but you honestly didn’t know you had to file or pay. In these situations, you can expect up to two primary penalties:

  • Failure to File (FTF) Penalty: For most individuals and businesses, this penalty is 5% of the unpaid tax for each month the tax return is late. This penalty maxes out at 25%.
  • Failure to Pay (FTP) Penalty: This penalty is 0.5% of the unpaid tax for each month the tax goes unpaid. Like the FTF penalty, this penalty won’t exceed 25% of the unpaid tax amount.

If both penalties apply to you in a given month, the FTF penalty is reduced by the FTP so that your penalty each month is 5% of the amount due instead of 5.5%, but other than that, these penalties can stack and get up to a maximum of 50% of your tax due. In addition to these penalties, the IRS will charge interest on the total amount due.

Criminal Penalties

This is a worst-case scenario and usually arises with tax evasion. Criminal penalties apply if you knew you had a legal obligation to file or pay, but you intentionally refused to comply or took steps to falsify information to make the IRS think you didn’t have to pay taxes. The precise criminal tax evasion penalties vary based on the nature of the offense and applicable federal statute, but can include:

  • Up to hundreds of thousands of dollars in fines and
  • Up to several years in prison.

However, in most cases, the IRS doesn’t pursue criminal penalties. Instead, the agency may apply a civil fraud penalty, which is 75% of the unreported tax due.

IRS Enforcement Actions

The IRS may be in a state of flux right now, but they’re still processing tax returns and taking action to collect unpaid taxes. It’s also important to note that a lot of IRS collection actions, including late filing notices, demands for payment, and tax liens, are initiated by the IRS’s computers through the Automated Collection System.

Substitute for Return

If the IRS believes you should have filed a tax return for a given tax year (and you didn’t), they may eventually file one for you with a substitute for return (SFR). This isn’t the IRS doing you any favors, as the return they file will (obviously) be based on incomplete information.

Therefore, it will almost always result in the IRS asking you to pay a bigger bill than you should. Despite the changes at the IRS, they’ve publicly declared that they’re still using SFRs, especially for higher-income taxpayers.

IRS Collection Actions

If you owe the IRS money, you can expect the IRS to continue its efforts to collect it from you. Don’t forget that much of the IRS’ tax collection efforts are automated, so staffing cuts might have little effect on the majority of collection actions. However, the longer you ignore the IRS and don’t negotiate a way to settle your tax debt, the bigger the tax debt will become and the more aggressive the IRS will be to collect the unpaid taxes.

For instance, the IRS can still rely on the tax lien to protect their financial interests in a taxpayer’s property. Then there’s the tax levy, where the IRS can legally take a taxpayer’s property with actions such as wage garnishments and bank levies.

Be Skeptical of Too-Good-To-Be-True Claims

The majority of taxpayers probably aren’t forgoing their filing or tax payment obligations because of something they heard from an acquaintance or read about online. However, it’s likely that at least a few people might fall for this misinformation.

This isn’t to say that a policy change at the IRS or a major overhaul to the U.S. Tax Code can’t happen. If it did, you’d see and hear about it everywhere. A new law affecting who has to file and pay taxes would be a major news story that outlets from both sides of the political spectrum would be talking about.

If you hear something you think (or hope) might be true, verify it with a reliable source, such as the IRS website or a tax professional.

Things You Can Do if You’re Behind on Your Taxes

If you’ve got tax bills you can’t pay, it’s okay to hope for a new program at the IRS, such as a “Fresh Start” or “Tax Forgiveness” program that can reduce or eliminate some of your tax balance. No new programs like this exist, although some can make it easier to pay off large tax bills, whether it’s by providing additional time to pay or reducing the total amount owed. Some of these options include:

Seattle Legal Services Can Help

If you’re struggling with your taxes, the good news is that help is available. It might not offer the “silver bullet” you’re hoping for, but the right tax resolution professional can help create a plan to settle your tax debt. At a minimum, it will be setting up an installment agreement or payment plan that offers more manageable monthly payments and provides more time to pay your tax bill without worrying about aggressive IRS collection actions.

In some situations, it can result in settling a tax debt for less than the full amount. Unfortunately, not all taxpayers are eligible for this type of solution. But you won’t know unless you contact a licensed professional, like a tax attorney from Seattle Legal Services, PLLC. The sooner you contact us, the quicker we can find an outcome that works for you and minimizes any growing penalties and interest you’re facing. To schedule a consultation, call us at 425-428-5262 or fill out our online contact form.

IRS Tax Requirement FAQs

Do I still need to pay taxes this year?

Yes, as none of the changes at the IRS so far under the Trump Administration have affected your legal duty to file and pay taxes. However, there are situations where people aren’t required to file, as listed above.

What if someone told me I didn’t have to file a tax return?

They could be right, as not everyone is legally obligated to file a tax return with the IRS. This only applies to certain people, though. So, before you skip this tax filing season, talk to a trusted tax professional or check the IRS’s website and don’t believe everything you see, hear, or read online.

Can I lose my refund if I file late?

No, as long as you file within three years of the due date, you can still get a refund.

What’s the best way to fix my situation if I didn’t file or pay my taxes?

As soon as practicable, contact a tax resolution professional, such as a tax lawyer. They can provide a clearer picture of your financial situation and help you choose your best option, such as filing past-due tax returns and/or establishing a payment plan for your unpaid tax balance.