It’s not uncommon for some families to have a few years where they did not file tax returns with the IRS for whatever reason. Sometimes people simply forget due to life events, or they feel that because they won’t be able to afford the tax debt the return would create they should even file. But unfiled tax returns can cause a snag for those families later.

Generally it doesn’t pose an issue if you made an income below the nationally established poverty line, which would mean that any tax you paid in is automatically refundable. They would still prefer that you file, but won’t get nasty about it that you didn’t since they realize they aren’t owed any money.

However, the one big caveat to unfiled tax returns is that if you ever need to negotiate with the IRS in the future over tax debt, such as setting up an installment agreement, they will require that you are fully tax compliant before they will approve anything.

Being tax compliant means that all of your tax returns are filed for the last 10 years. So if you file this year, owe money, and need to set up a payment plan to resolve the balance, they may require that you satisfy an unfiled tax return from 3 years ago before they will approve the payment plan for this year.