You don't pay taxes (even if it's not your fault) - At worst they come to your house with guns, rip you out and throw you in prison - At best, you can never get a non-cash job opportunity. Your wages must be garnished by employers, which makes you not only a risky hire, but also a complicated one and can often be turned down from a position. Smaller business do this all the time. Ask husbands who refuse to pay child support. You can't take many forms of new debt, difficult to start a business etc. Depends on the agency taxes are owed to.