2. Reduced or No Income Tax Refund

The IRS will take future income tax refunds and government money owed to you, such as stimulus payments or tax credits, until your tax debt is paid in full. If you expect a refund during tax season but owe some past due taxes, you may receive a reduced refund or no refund at all.

3. Creditworthiness may take a hit

If you have piles of unpaid back taxes, eventually, usually by the time you owe the IRS nearly 1,00,000  the federal government will put a lien on your property, most likely your house. You might also get hit with a state tax lien or one from your county. These are documents filed with the county government; if you sell your home, before you see any profits, the government will take what you owe first.

But before that happens, tax liens show up on your credit report as unpaid debts, and they will have a significant negative impact on your credit score. The appearance of a tax lien or liens may not prevent you from getting a loan -- for a credit card or car.