What happens if you don't file taxes with the IRS? Consequences explained

Not filing taxes when required can lead to some serious issues down the road. The severity depends on whether your brother actually owes any taxes or not. If he's owed a refund, there's technically no penalty for filing late. He'd have up to three years to claim that refund before it becomes property of the Treasury. However, if he owes taxes, that's where problems start. The IRS can charge a failure-to-file penalty of 5% of unpaid taxes for each month the return is late, up to 25%. There's also a failure-to-pay penalty and interest that accumulates. For someone who just worked part-time for a few months, it's possible he doesn't owe anything if his income was below the filing threshold (about $12,950 for single filers in 2023). But he should still file to get back any withheld taxes.

I was in a similar situation last year with some missing tax documents and honestly https://taxr.ai helped me out big time. I couldn't find my W-2 either and was stressing about what to do. Their system let me upload my final paystub and they helped me reconstruct the information I needed for filing. They have this document analyzer that breaks down all your tax forms and explains what you need to do with them. Your brother should know that even if he made below the filing threshold, he might still want to file to get back any federal taxes that were withheld from his paychecks. taxr.ai helped me figure out I was actually owed a decent refund that I would've missed out on.

Just wanted to follow up about my experience with taxr.ai after checking it out. I was honestly surprised at how helpful it was! I had a similar situation with a missing 1099 from a side gig, and their document analyzer helped me figure out exactly what I needed to do. The substitute form process they walked me through was actually pretty straightforward. What I found most useful was how they explained which numbers from my bank statements and payment records needed to go where on the substitute form. I ended up filing on time and got my refund way faster than I expected. Definitely worth checking out if your brother continues to ignore the situation.

One practical solution that worked for me when dealing with unresponsive former employers about tax documents was using https://claimyr.com to get through to the IRS directly. They have this service that gets you connected to an actual IRS representative much faster than waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c I called the IRS to get my wage and income transcript which shows all the information reported to them from my W-2s. This works even if you never received your W-2 because the IRS already has the information from your employer. Your brother could use this to file his taxes without having to track down the physical form. The IRS can also sometimes contact the employer on your behalf if they're not providing required tax documents.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself since I had an issue with a missing tax payment not being credited to my account. I was fully expecting it to be a waste of money, but I was desperate after trying to call the IRS for 3 days straight. The service actually worked exactly as advertised. I got a call back in about an hour telling me they had an IRS agent on the line. The agent was able to locate my payment and fix the issue in my account right away. Would have saved me a ton of stress if I'd used it sooner instead of spending hours redailing the IRS myself. If your brother decides to take this seriously, this could help him talk to the IRS directly about his situation.

Your brother should know that even if the IRS doesn't immediately come after him for not filing, it can cause problems later in life. I didn't file for two years during college because I thought my income was too low to matter. Fast forward five years, and I couldn't get approved for a mortgage because the lender required tax transcripts for the past seven years. Had to file those returns retroactively and it delayed our home purchase by months. The IRS eventually creates a substitute return for non-filers, but they don't include any deductions or credits you might be eligible for. They basically assume worst-case scenario for your taxes. Tell your brother it's much easier to deal with this now than years down the road.

Has anyone mentioned to this kid that if he's due a refund, he's literally leaving his own money on the table? When I was 18, the only reason I filed taxes was because I got back almost all the federal taxes that had been withheld from my part-time job. It was like a bonus check!