What Happens if You Stop Filing Tax Returns

Sometimes, for various reasons, people will simply stop filing their tax returns. They might do this for one year, or they might do it for multiple years in a row. While you should never be tempted to simply stop filing your returns, you may be curious about what happens in this situation. While there is no one exact answer for every person, there is one common course of action that the IRS is likely to take should you fail to file.

A Substitute Return

One thing that may happen when a return is not filed is that the IRS may file what is called a substitute for a tax return. They will fill this form out based on the information they have available on you, whether it is accurate or not. From there, they can use that information to start collection activities against you.

As you can imagine, a substitute return is not in your best interest. The IRS is not going to file for deductions or anything else to cut you any tax breaks. Instead, in most cases, they will charge you the maximum amount possible, which could leave you owning some serious cash.

To avoid having a substitute return filed, always file your own returns on time, preferably with the help of a tax professional.

Your Rights

While it’s best to avoid a substitute return being filed in the first place, you do have options if one is filed and you don’t agree with the amount you owe. You can, for example, choose to go to tax court and attest the IRS’ assessment.

However, this is often a long, complex, and difficult process that you should avoid if you can. If it’s too late for that, contact a tax professional for assistance.

However, when possible, you’re much better off just filing your returns on time, with professional help, to avoid hassles and situations like this one.