There are many reasons why a taxpayer did not file a tax return. If you find yourself in a situation where you have unfiled federal tax returns, there are some important things that you need to know:

1) The IRS can file a return on your behalf. Employers and other entities report your tax information to the IRS. If you do not file a return, the IRS may file a return for you. However, this return will generally result in a much higher amount due as the IRS does not account for deductions such as dependents, filing status, and itemized deductions.

2) The statute on assessment does not start until a return is filed. In general, the IRS can assess additional balances for three years after a return has been filed. However, if the return is never filed, then the statute does not begin, leaving the tax return open to additional assessment indefinitely.
3) You are non-compliant with the IRS and cannot establish resolution on your account. In order to request a federal payment plan, currently non-collectable status, or an Offer in Compromise, you must be in compliance with the IRS. One condition of compliance is that you have filed all required returns. Until all returns are filed, you will not be able to establish resolution.
4) You may default any previously established resolution on your account. Not only do you need all of your returns filed to establish resolution on any outstanding balances, you also need to continue to file your returns in order to keep your resolution.
5) You may miss out on refunds. You must file a return within three years from the due date (including extensions) in order to be eligible to receive any refund that is due to you. If you do not file your return within this time frame, the IRS will not issue you your refund and they will not apply it against any other taxes you may owe.

If you have unfiled tax returns, you should seek tax help immediately. The sooner you file your returns, the sooner you can get your balances resolved and move forward with your life.