Are there valid reasons for NOT filing taxes?

A CPA explains three situations where clients delayed filing taxes: to avoid a second audit, to protect a lawsuit settlement, and to escape criminal prosecution after eight years of non-filing. He warns that penalties, interest, and jail time are real risks, though he must always advise filing on time.
Chapters
So the question is, are there any valid reasons to not file certain taxes? Um, as a CPA, my license requires me to say no. I now want to share with you a couple stories of people that are taxpayers. And As a fun story for you. So, um, I know of a person who once had a tax return being audited. And if this person were to have filed the current year tax return while the audit was still open, the new return automatically basically is going to be added into the current audit that already is taking place. So you have the auditor and usually, let's say they contact you, they— you're about 2 years past the time it was filed for the returns that you get selected for audit. What I mean is, so if it's 2022 and so that's tax filing for 2021, it would be pretty common that at this point, if so, if the IRS wrote you a letter saying we're auditing your tax return, they're probably looking at 2019's tax return. And so in his case, he had a past year that was open for audit. And there were, you know, we were helping him and we were sending information back and forth and handling all that stuff. He chose to file his returns at a different time, which meant that Once the audit was closed, he then filed his tax return and he avoided getting the— in this example, the 2021 return, he avoided having that automatically audited. So that's one story. Again, as a CPA, my license requires me to tell you, you should always file your certain taxes by the deadlines. And then I also know of another guy who was involved in a legal lawsuit, and based on the factors surrounding his lawsuit case, uh, he did not get me information in a timely fashion so that his return could be filed by the deadline. And, um, his strategy in that, I believe, was to get through the lawsuit quicker, and potentially filing the current year tax return might have changed some of the discussions in the settlement and the mediation that they had going on. So those are a couple examples of people I know that through their own choices chose not to file by the deadline. I can also tell you this, though. One of my first clients I took on was a guy who had been approached by an actual IRS auditor. They came to his house and knocked on his door. Sometimes those are scams. In this case, it was legit. He had a letter from the IRS. We were able to pull transcripts and find out that in fact, everything matched, which is always good due diligence anytime a government official comes knocking on your door. But in his case, he hadn't filed for the last 8 years, and the IRS frowns upon that. I mean, honestly, a lot of times, whatever the IRS frowns upon, we don't really care. These guys are not— they've lost the level of humanity. It's, you know, I won't go down that soapbox for you. But I will say this. You have to file your tax returns. They can put you in jail for not filing. If you file late, if you pay late, if you make a mistake on accident on your tax returns, a lot of time that results in a financial penalty. But they theoretically have the power to put you in jail. And they have done that for some people. So in his case, not having filed for 8 years, coupled with the information that the IRS automatically gets sent to them of what was paid to this individual, yeah, they were basically giving him a deadline in which to have all the 8 past 8 years filed. So in his case, he missed the deadlines, and I think he was hoping he could avoid it forever, but we definitely had to help him get those returns done. So that he didn't go to jail. So hopefully that answers the question that we were asked. Uh, the question was, are there any valid reasons for not filing certain taxes? Remember, profit is a choice. Have the courage and wisdom to choose it.










