The IRS sends correspondence to a taxpayer’s last known address, usually the address from their most recently filed tax return. If the taxpayer moves and does not send a change of address to the IRS, they may not receive an IRS notice and could miss the deadline to respond.
There’s no penalty for not filing a return if due a refund, but there’s also no statute of limitations for assessing and collecting taxes due if no return has been filed.
Interest is charged on any tax not paid by the April due date and will accrue until paid in full. Individual taxpayers are charged the federal short-term interest rate plus 3 percentage points, currently 5% per year, compounded daily. Penalties will accrue for each month tax remains unpaid until maxed out at 25% of the unpaid tax.
Submitting a tax return and paying any amount owed as soon as possible can help taxpayers avoid further interest and penalties.