If a business operates without paying taxes, what possible irs business tax penalties does it face?

A business that failed to file and paid no taxes by its return’s due date is subject to:

• Penalties
• Late-filing penalty
• Late-payment penalty
• Interest

These will apply until the business owner pays the balance of the business taxes. If the IRS determines that fraud is involved, a business owner will be subject to:

• Non-payment penalties and additional fines
• Sanctions
• Possible criminal prosecution with jail time

Also, if a business has employees and doesn’t pay payroll taxes, it might be subject to the trust fund recovery payment. This is a 100% penalty that can be assessed against any person in the employer’s business who:

• Is responsible for collecting, accounting for, and paying withheld employment taxes
• Willfully fails to collect or pay these taxes