What is the potential impact of filing a tax return late?

Filing a tax return late can lead to potential penalties and interest accrual. When a taxpayer misses the deadline, the IRS typically assesses a failure-to-file penalty, which can be a percentage of any unpaid taxes for each month the return is late. Additionally, interest on any balances owed begins to accrue immediately after the due date. This means that not only is the taxpayer responsible for the original amount due, but they also face added costs over time, making it crucial to file on time to avoid these financial repercussions.

The other options do not accurately represent the consequences of late filing. There is no rule that grants a complete elimination of penalties for late filings. An automatic extension of filing time is also not granted simply for not filing on time; extensions must be actively requested before the original deadline. Lastly, there is no relation between late filing and an increase in refund amounts; in fact, failing to file could delay any potential refunds.