Consider that there are various kinds of taxes.
State and federal income taxes.
State sales and use taxes.
The OP can expect her town will notify the state, and the state will notify the feds.
It is very common in situations with an unregistered business that the 'business owner' does not have adequete business records for the various government tax agencies to use for accurately assessing the unpaid tax liablities, and for setting the various fines and penalties that accompany getting caught.
In that type of a situation the government agencies will just guess how much tax is owed and what the penalites and fines will amount to.
If the OP is on the level it is highly likely her financial circumstances are about to be radically changed for the worse.
Her town may, or may not, allow her to register/license her business now.
Frankly, I think her biggest concern will wind up being the state (for income, sales, and use taxes) and the feds (for income taxes).