The number of years you can go without filing taxes depends on various factors, including your individual tax situation, the amount of income you earned, and whether you are owed a refund or owe taxes.
Here are some key points to consider…
- Filing Requirements – If you meet certain income thresholds, you are required to file a tax return each year. The income thresholds vary depending on your filing status, age, and other factors. For example, for tax year 2023, single taxpayers under age 65 must file a tax return if their gross income is at least $12,950.
- Refund Eligibility – If you are owed a refund, there is typically a three-year statute of limitations for claiming that refund. This means that if you do not file a tax return within three years of the original filing deadline (including extensions), you forfeit your right to claim any refund you may be owed.
- Penalties for Late Filing – If you owe taxes and fail to file a tax return by the deadline, you may incur penalties and interest on any unpaid taxes. The failure-to-file penalty is generally 5% of the unpaid tax amount for each month or part of a month that the return is late, up to a maximum of 25% of the unpaid tax.
- Statute of Limitations – The IRS has a statute of limitations for assessing additional taxes, which is generally three years from the date you filed your return or the due date of the return, whichever is later. If you never file a return, there is no statute of limitations, and the IRS can assess taxes at any time.
- IRS Enforcement – While the IRS may not pursue enforcement actions immediately for unfiled tax returns, they can take action to compel compliance, such as assessing penalties and interest, initiating collections proceedings, or pursuing legal action, including criminal charges in extreme cases of tax evasion.
That failing to file taxes is a serious matter with potential consequences, including financial penalties, interest charges, and legal repercussions. If you have unfiled tax returns, it’s advisable to consult with a tax professional or accountant to address your situation promptly and take appropriate steps to come into compliance with tax laws.
