Trucking & Taxes – November 2025

Let’s just lay this out here from the get-go. If the IRS owes you a refund, you have only three years to file and claim it. Otherwise, the IRS keeps the refund. If you owe and don’t file, then you are faced with the consequences of not filing your taxes.

To be blunt: It’s better overall for you to file your taxes even if you know you can’t pay them.

Filing your taxes before the deadline will let you avoid the “failure to file” penalty, which is 5% of your unpaid tax balance. An additional 5% will stack each month after that, up to a maximum of 25% of what you owe after five months have passed.

What can happen if I don’t file my taxes?

1. The IRS will send a letter. The IRS may send you a letter saying that you have not filed your taxes. If you receive a letter, it typically tells you what you need to do, how to respond and what action may be necessary. Also, it will tell you what will happen if you don’t comply.

2. Can the IRS file my tax return for me? The IRS can file a return for you. It files a form called a substitute for return (SFR). Of course, when it files this SFR, it doesn’t file in your favor. The IRS will include only the income reported by your employers and your contract income. It will not allow for deductions, credits or exemptions in your favor. Also, the SFR will be assessed a late-filing penalty. Overall, it’s not a good replacement for filing your own tax return.

3. Can I go to jail for not filing my tax return? Yes and no. It depends on multiple factors. Failing to file a tax return is a misdemeanor. To make this a felony with jail time, the IRS would have to prove that an overt, willful act of tax evasion has occurred. Even with this possibility, the IRS usually doles out only civil penalties. It typically gives numerous warnings and plenty of chances to file, even years after the first offense.

4. Is not filing taxes the same as tax evasion? There’s tax avoidance and there’s tax evasion. These terms, although often used interchangeably, are vastly different concepts and are considered separate things (with only one of them actually being a violation). Tax avoidance is defined as “an action taken to lessen tax liability and maximize after-tax income.” Although the word “avoidance” makes it sound a little sketchy, the IRS considers it perfectly legal. Tax evasion, which is defined as a failure to pay or a deliberate underpayment of taxes, is illegal. The most common way that people evade taxes is by underreporting their total income for the year, particularly when the money comes from non-traditional sources, such as illegal activities and the underground economy.

5. Can I file my own return after the IRS files a return for me? Yes, you can file a past-due return of your own over the substitute for return issued by the IRS through an SFR reconsideration. Of course, you will still be assessed and have to pay the failure-to-file penalty. But filing your own return allows you to claim exemptions, credits and adjustments, while the SFR does not – thereby enabling you to decrease the amount of tax due as well as penalties and interest.

6. Is there a statute of limitations on late tax returns? There is no statute of limitations on unfiled tax returns. No matter how much time has passed, the IRS can go back to any year that you did not file your taxes and issue penalties based on your tax liability that year.

7. Will the IRS penalize me if I am due a refund? If you are due a refund and file your taxes late, there is no failure-to-file penalty. However, if you file more than three years after the filing deadline, you will not get your refund. It is best to file taxes as soon as possible.

Misconceptions about not filing

There are many misconceptions about failing to file tax returns on time. Here are some of the most common ones.

1. If you don’t owe taxes, you don’t have to file. This is wrong! Filing a tax return is mandatory even for taxpayers who technically owe nothing to the IRS, provided that their income is above a certain threshold. We recommend that everyone file regardless.

When you choose not to file a return because you do not owe taxes, you open a door to penalties and other legal consequences.

Also, when you do not file a return, you might miss refunds or credits for which you may qualify, such as the Earned Income Tax Credit.

2. You don’t have to file if you don’t make money. It is a common thought that people with low or no income are exempt from filing taxes. Yes, there are income thresholds that do exempt some individuals. However, making even $400 or more from self-employment mandates you to file and pay taxes on those earnings.

3. The IRS hasn’t contacted me, so I don’t have to file. Just because the IRS hasn’t sent a letter doesn’t mean you’re not on its radar. The IRS can track your income in a variety of ways (such as a W-2 or 1099).

4. I’m too far behind to catch up. Paying back taxes is an intimidating prospect, particularly if you have avoided them for years. However, ignoring them is only delaying the inevitable, as there is no statute of limitations when it comes to back taxes.

While all potential consequences are serious, the main thing to take away from this article is that in most cases, a failure to file tax returns will most likely lead to penalties but not jail time.

If you have unfiled taxes, don’t delay. Call Taxation Solutions Tax Relief for a free consultation to determine your best course of action. LL