What Happens If You Don’t File Your Taxes But Don’t Owe Anything?

It’s a common concern—what happens if you’re behind on filing taxes, but you’re not expecting a refund or don’t owe anything to the IRS? Are you still in trouble? Will you get hit with penalties?

Let’s break it down.

A Question from the Community

One of our founder Logan Allec’s YouTube viewers recently shared their situation:

“Hi Logan, I haven’t filed my taxes in five years (2020–2023), but I did file my 2024 taxes and got a $339 refund. I’m now working on filing the rest of my late returns to get back in good standing with the IRS. I know I won’t get refunds for 2020 and 2021, but I might get a little something back for 2022 and 2023. I’ve always gotten refunds, never owed taxes. My question is—will I get penalized for not filing extensions for those late years?”

Great question—and one that many people can relate to.

No Tax Due = No Penalties

Here’s the good news: If you don’t owe any taxes on your late returns, you won’t be penalized for filing them late. That’s because the IRS penalties for failure to file and failure to pay are both based on how much tax you actually owe.
Let’s look at the math:

• Failure to file penalty: 5% of the unpaid tax per month, up to 25%.
• Failure to pay penalty: 0.5% of the unpaid tax per month, up to 25%.

If the tax due is zero, then 5% of zero is still zero. No penalties apply.
So, in the YouTube viewer’s case—and in yours, if you’re in a similar situation—there won’t be any failure-to-file or failure-to-pay penalties if your returns show that you don’t owe anything or you’re due a refund.

But Watch Out for the Refund Deadline

There is one major downside: You could lose your refund if you wait too long.
The IRS gives you three years from the original due date of a return to file and claim your refund. If you filed a valid extension, that three-year clock starts from the extended deadline. Miss that window, and the IRS gets to keep your money.
For example:

• • 2020 tax return (due April 15, 2021): You must file by April 15, 2024 to get a refund.
  • 2021 return (with extension): Extended due date was October 15, 2022, so you must file by October 15, 2025 to get that refund.

  If you don’t file in time, the IRS keeps the refund—no exceptions.

The Bottom Line

If you’re behind on your taxes but don’t owe anything, you likely:

• • Won’t get penalized
  • Could lose any refund you were owed if you wait too long

That’s why it’s still important to catch up, even if you think it doesn’t matter. And if you’re not sure where to start, we can help.

Author:

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Rylee Holwager, Social Media Manager

Rylee Holwager graduated from California State University, Northridge in 2022 with a bachelor’s degree in journalism and a minor in communications. She has loved nothing more than telling stories and providing the people with what they need to know. Her career is only in the early stages, but she has already held titles such as marketing administrator, staff writer, social media editor, freelance UGC creator and now social media manager. Here at Choice Tax Relief she is excited to come to work every day to bridge the gap between confused taxpayers and complicated tax concepts.

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