Failure to File a Tax Return is a crime and can lead to significant penalties and interest. It occurs when an individual or business does not file their tax return on time or accurately. This includes not filing a tax return, filing a late return, or filing an incorrect return. There are three main types of Failure to File a Tax Return: 1. Willful Failure to File: This occurs when an individual or business intentionally does not file a tax return or files an incorrect return. Penalties may include fines and/or jail time. 2. Negligent Failure to File: This occurs when an individual or business fails to file a tax return or files an incorrect return due to negligence or carelessness. Penalties may include fines, interest, and/or other penalties. 3. Nonfiling Penalty: This occurs when an individual or business fails to file a tax return or files an incorrect return due to a legitimate reason, such as financial hardship or illness. Penalties may include fines and interest.