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I had to apply at the post office. I’m pretty sure there was a penalty if I didn’t, like a fine or jail
$250k fine, but they haven’t prosecuted anyone since the 80s, and even then, it was only a handful and typically only when the person went around bragging about it in protest.
The bigger deal is being barred from federal employment, contracts, grants, and other programs. Some states may deny drivers licenses because of it. And it used to mean you couldn’t receive federal financial aid for college, but that changed in 2020.