What Happens If You Don’t File Taxes?

Look at the Risks and Consequences of Not Filing Tax Returns. Not filing your taxes can have significant consequences, even if you don’t think you owe a balance to the IRS. Failure to file can cause you to lose tax refunds or subject you to harsh penalties and collection actions. To help you understand the risks, this post outlines what happens if you don’t file a tax return, and it breaks down the consequences based on whether you owe or don’t owe money.

To get help with unfiled returns now, contact us at the Timothy S. Hart Law Group today.

Key Takeaways – consequences of not filing

• Loss of refund – Even if you’re not required to file, you may want to file to claim a tax refund.
• Harder to get loans – Lenders often use your tax returns to verify your income, especially for mortgages.
• IRS seizure of future refunds – If you don’t file for a few years and then you file, the IRS may seize your tax refund.
• Risk of IRS tax assessment – If you do not file, the IRS may issue a substitute for return and assess tax against you.
• Legal risks – Willful failure to file may constitute criminal tax evasion in some situations.

Unfiled Taxes: When You Owe Taxes and When You Don’t

The IRS doesn’t treat all unfiled returns the same. Even if you don’t provide any information to the tax agency, they likely already know a lot of information about you, such as your income levels and the taxes you should’ve reasonably owed if you filed.

If you miss your tax deadline without filing your returns, then you’ll generally fall into one of two categories:

• Unfiled returns and you owe – The IRS will attempt to estimate what you would’ve owed if you filed (using a substitute for return) and then take action to collect the unpaid taxes.
• Unfiled returns and you don’t owe – The IRS will generally not reach out to you. If you’re due a refund, you will forfeit it unless you file within three years of the return due date.

In both situations, you could face serious long-term consequences until you correct the situation and file for past years.

What Happens if You Don’t File and You Owe Taxes

When the IRS thinks you owe a tax debt but you haven’t filed your tax return, they’ll be in touch. Even if it takes a few years, the agency will eventually reach out about the unfiled taxes. Here’s what to expect.

• Demand to file – The IRS typically starts out by sending you a letter demanding that you file a return. They may also include Form 15103, which you can use to explain why you didn’t need to file or that you’ve already filed.
• Tax account review – One of the first things the IRS will do is perform a tax assessment on your account. This assessment will take into account all the financial details the IRS has about you, for example, 1099s or W2s issued by banks, clients, employers, etc.
• Substitute for return – Once the IRS estimates what you should owe, they’ll prepare a return on your behalf called a substitute for return (SFR). When the IRS prepares your tax return, it won’t be as advantageous as a return that you complete on your own. That’s because the IRS will not take the time to diligently research which tax deductions or tax credits would benefit you. Instead, they’ll simply estimate your tax burden and likely assume your filing status based on the information they have on file – generally, SFRs use single or married filing separately as the filing status.
• Notice of deficiency – The IRS will send you a 90-day letter after the SFR – often that’s the CP3219N notice. That will explain that if you don’t appeal in 90 days (150 if you’re out of the country), the IRS will assess the tax against you.
• Penalties – Once the tax is assessed, the IRS can begin leveraging financial fees and penalties against you to encourage you to file your taxes and pay off what you owe. The failure-to-file penalty can get up to 25% of your overall unpaid tax balance, and the failure-to-pay penalty can also get up to 25% of your balance.
• Interest – The longer you have a balance due, the more interest will accrue on your account. Interest will be backdated to the original due date of the return, and it will also accrue on the penalties.

If you do not respond to the IRS’s notices about filing late and charging financial fees on your account, then the IRS will move on to the next step in the collections process. Depending on how much you owe and your current financial situation, the IRS likely has several options for handling your account.

Some of the most common collection efforts include seizing future tax refunds, filing a federal tax lien against you, garnishing your wages, freezing the money in your bank accounts, and seizing your assets. The good news is that asset seizure is almost never a surprise – the IRS must give you a 30-day warning and send you a Final Notice of Intent to Levy.

What Happens If You Don’t File and You Don’t Owe Taxes (or You Think You Don’t)

If you don’t file your tax returns but you don’t owe the IRS anything, then your case will be treated far less harshly. Rather than reaching out to you to attempt to fix the situation, the IRS will only take action if it’s reasonable and convenient for them to do so.

One of the major things you’re risking if you don’t file when you don’t owe is your tax refund.

You have up to three years to claim a refund. If you don’t file your taxes within that time, then you will automatically forfeit the return.

Even if you don’t owe taxes, you are legally required to file a return if your income exceeds a certain threshold. For 2025, you must file if your income exceeds the following thresholds:

• Single filer – $14,600
• Head of household – $21,900
• Married filing jointly – $29,200
• Married filing separately – $5

Blind taxpayers and taxpayers over age 65 have slightly higher filing thresholds. However, if your income is under the threshold, you may need to file if you meet a specific filing requirement – for instance, having unreported tip income, earning over $400 in net self-employment income, or being a dependent with over $1300 in unearned income.

Don’t make the mistake of assuming that you don’t have to file your taxes just because you don’t earn an income. In 2020, around 5.3 million individual tax returns were filed that showed no taxable income. These returns were filed to maintain compliance, obtain tax refunds, and avoid the consequences of not filing.

There is also no statute of limitations on unfiled tax returns, so you always run the risk of the IRS looking back on the years you didn’t file and deciding to assess taxes against you for that year.

Common Reasons People Don’t File Taxes (and Why That’s Risky)

There are many reasons that people don’t file tax returns, including:

• They can’t afford how much they owe – If that’s the case for you, then know that you’ll only increase what you owe by not filing in time.
• They don’t understand their tax obligations or don’t think they owe anything – In general, it’s better to file an unrequired return than to fail to file a required return.
• They’re overwhelmed or unsure about their tax situation – If that’s the case, you’re not alone. Don’t hesitate to reach out to a tax professional who can guide you on your best options moving forward.

How to Fix Unfiled Tax Returns (No Matter the Reason)

When you need unfiled tax help, the best place to turn is a legal tax professional. A tax resolution attorney can help you solve your unfiled tax return situation by helping you go over past financial information, document your income and expenses, and file the right paperwork.

Your attorney can also negotiate with the IRS to ensure your rights are respected and your best interests are upheld throughout the process. A tax attorney can also help you set up payment plans or apply for settlements if that’s right for your situation.

The Legal Risk: When Not Filing Becomes Criminal

If you have unfiled returns for years and you likely owe a significant tax debt, then your case could potentially become a criminal situation. If you acted willfully or didn’t file in a deliberate attempt to evade paying taxes, you may face tax evasion charges. The IRS typically focuses on taxpayers with a history of intentional avoidance or with high-dollar tax debts, but even middle-income earners may face criminal charges in certain situations.

If you believe you may be at risk of criminal exposure, contact a tax attorney immediately.

When to Talk to a Tax Professional

In general, it’s best to get in touch with a tax professional when you’re not sure how to handle your tax situation or you simply want an advocate who will be able to support your best interests throughout the process. Tax professionals can leverage their experience and knowledge to ensure the IRS treats you fairly.

You should talk to an agent if you haven’t filed in years, you don’t know what you owe, you’ve received several notices from the IRS already, you have a complex financial situation, or you’re nervous about triggering an audit.

Contact Our IRS Tax Pros Now to Get Started on Resolving Your

Frequently Asked Questions

We recommend reaching out directly to our firm to get specific answers to your most important tax questions. That way, you can get personalized legal counsel that matches your unique circumstances. That said, we will go over some general answers to some of the most frequently asked questions about the risks of not filing taxes below.

Will the IRS come after me if I don’t file taxes?

The IRS has the legal right to pursue collection efforts against taxpayers who owe a debt and are not complying with attempts to resolve the situation. If you don’t file taxes and you owe a significant amount, then the IRS will likely pursue the unpaid taxes.

How many years can I go without filing taxes?

If you’re not required to file (for instance, because your income is under the threshold), then you can go your whole life without filing a tax return. However, if you are supposed to file, the IRS will generally reach out. The timeline varies – in some cases, you may hear from them months after the filing date, but in other cases, you may not hear from them for years.

Can I file past returns and still get a refund?

You might be able to file past returns and still get a refund if you do so within three years of the tax due date. As an added bonus, the IRS will also tack on interest backdated to the original due date – so your refund may be a bit bigger than expected.

What happens if I didn’t owe any taxes – do I still need to file?

It depends. If your income is over the threshold, you need to file, even if you don’t owe the IRS any money. Additionally, even if you don’t owe, you may need to file due to other circumstances, even if your income is under the threshold.

Can I go to jail for not filing taxes?

Generally, you will not go to jail for not filing your taxes. You can, however, go to jail if the IRS brings criminal charges against you for failure to file in an attempt to evade taxes.

Get help now – take the first step towards compliance today.

Schedule a case review with our tax attorneys now by leaving your contact details on our online form. You can also reach out directly to our Albany location at (518) 213-3445 or our New York location at (917) 382-5142. We’ve helped hundreds of taxpayers solve their tax problems and get back on track, and we can help you.