What is the consequence of failing to file a corporate tax return?

Failing to file a corporate tax return can lead to significant financial consequences, primarily in the form of penalties and interest that may accrue on the unpaid tax liability. When a corporation does not file its tax return by the due date, the Internal Revenue Service (IRS) imposes penalties for late filing, which can increase over time. Additionally, interest accrues on any unpaid tax from the original due date until the tax is paid in full. This adds further financial burden to the corporation.

The penalties are designed to encourage compliance with tax laws and deadlines. The longer the corporation delays in filing the required tax return, the greater the financial repercussions will be, including the potential for increased scrutiny from tax authorities.

In contrast, some other options suggest less severe consequences, such as a warning only or that there are no consequences at all. However, corporations that do not meet their tax obligations face real financial penalties, making it crucial for them to file returns timely to avoid additional costs and complications in their financial management. Therefore, the potential for penalties and interest to accrue is a serious matter for corporations that neglect their tax filing responsibilities.