1. Financial Penalties: Fines and interest on unpaid taxes can accumulate, putting financial strain on the business. 2. Legal Actions: Severe cases can lead to lawsuits, and even criminal charges. 3. Reputation Damage: Being caught can tarnish a business’s reputation, affecting relationships with customers, investors, and partners. 4. Operational Disruptions: Audits and legal proceedings can divert time and resources away from core business activities.