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Frequent Tax Issues for Non-Filers


Many people underestimate the importance of filing taxes before Tax Day or later with a valid extension from the IRS. In fact, most taxpayers are unaware of the risks and penalties that are associated with a failure to uphold the tax return deadline, such as being charged with fines or, in extreme cases, criminal charges.


If you are struggling to file your taxes before the deadline, work with an experienced tax attorney to ensure you don’t incur any expensive fines or serious penalties. Here are some of the issues that those who fail to file their taxes can expect to encounter.

You May Not Be Able to Collect a Tax Refund

Of all the consequences associated with failing to file on time, losing your eligibility for a refund is one of the worst. Federal and state tax refunds have a statute of limitations, meaning you have a set amount of time—which is usually three to four years—to receive a refund after you file your taxes. If a taxpayer fails to file their taxes within this time frame, the IRS will prevent the taxpayer from participating in and benefiting from certain advantageous tax programs, including:


● Receiving a tax refund

● Applying for tax credits

● Overpaying on taxes


There are certain unique scenarios that allow a taxpayer to delay the statute of limitations for their tax returns. However, you should never assume that you have the option to delay your filing deadline.

You May Lose Social Security Benefits

Another issue people will face who don’t file their taxes is the potential to lose their Social Security benefits. Specifically, taxpayers who are self-employed who fail to file their tax returns are unlikely to receive credits for Social Security retirement or disability benefits, as their income was not reported to the Social Security Administration.

You May Struggle to Receive a Loan

If you plan on taking out a loan but haven’t paid your taxes, it could complicate the approval process. To receive a loan, you usually have to provide copies of your recent tax returns to the financial institutions and lenders from whom you wish to obtain the loan. If you haven’t filed your taxes, you won’t have the necessary documents needed for loan approval.

Penalties for Non-Filers

In addition to the general issues outlined above, a failure to file your taxes could result in penalties. In fact, the IRS has various avenues—such as filing a substitute return or issuing a tax lien—they can take to penalize individuals who fail to file their taxes.


When an individual fails to file their taxes, the IRS may file a substitute return on their behalf, which usually does not take into account the typical advantages taxpayers have at their disposal, such as deductions, exemptions, and other tax breaks. As a result, these substitute returns tend to hurt rather than help a taxpayer. If you receive a notice from the IRS of their intent to pursue a substitute return, seek legal representation to ensure you are best protected.


Another path the IRS may take to penalize a taxpayer is to place a tax lien on their property. This lien essentially acts as a claim against the person’s property for the unpaid amount of tax that is owed. Any property with a federal tax lien attached to it cannot be sold until the taxes are paid and the lien is removed. This tax lien could be placed on all kinds of property, including personal property, real estate, and any other assets owned by the taxpayer. Tax liens are serious business. Therefore, if you are notified of a potential lien, you should seek legal counsel in a timely manner.

Consult a Skilled Tax Resolution Attorney

If you have been informed of a field audit being conducted against you or of a tax lien or levy placed on your property by the IRS, it’s in your best interest to seek legal representation. At Morgan Sebastian Law, Attorney Becky Sebastian is eager to help you navigate the complexities of your tax situation. We understand that accurately filing your taxes can be a challenge, and we’re here to help guide you through the audit process.


To schedule a consultation with an experienced tax resolution lawyer, call (877) 223-6605 or fill out our online contact form.