When you work for someone they automatically deduct tax from your pay and give it to the government. Filing your tax returns allows you to get money back if they taxed you too much. So why is not filing your taxes a crime even if you don't make any money from someone other than your employer? If you don't file your taxes the only thing that could happen is the government gets more money than they should, so it doesn't seem reasonable that not taking your money back from the government and letting them keep the extra money is a crime.

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    A large chunk of the reason behind this is political, and has been discussed on the politics SE politics.stackexchange.com/questions/30223/…
    – Gramatik
    Jun 13, 2018 at 16:35
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    I can't roll my eyes hard enough at that. Nevermind that this question has absolutely nothing to do with whatever cost may be associated with filing taxes and everything to do with the fact that your employer only withholds an estimate of your tax due and your actual tax due will be determined after the year closes and all of your relevant deductions and expenses are deducted against all your relevant income.
    – quid
    Jun 13, 2018 at 22:33
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    @quid: still, e.g. in Germany in the described situation filing a tax declaration is voluntary, so very far from a crime. Tax withholding by the employer is calculated in a way that makes sure taxes are never underpaid. Also capital gains tax is withheld automatically by bank/broker, so does not trigger the duty to file a tax declaration (as long as you have only domestic banks/brokers). You are required to file a tax declaration (which also had different deadline than the voluntary filing) only if you have other sources of income (rental property, freelancing, ...). Jun 14, 2018 at 14:28
  • @cbeleites I don't want my brokerage to withhold capital gains taxes. That sounds like a worse system to me.
    – quid
    Jun 14, 2018 at 15:25
  • @quid: that's not voluntary over here... But yes, while one could see it as a service that predictable taxes are collected immediately and in consequence the hassle of a tax declaration is avoided, this is not how things work out over here, and the general impression is more between nanny state (= people are incompetent) or mistrust towards the own residents. (Still, there are yet worse systems. E.g. in Italy, some documents are only valid if a tax stamp is stuck onto them. I.e. you have to buy tax stamps (= pay taxes) already before the thing happens that costs the tax!) Jun 14, 2018 at 16:30

6 Answers 6


Why are you required to file your taxes if you employer deducts them for you?

Your employer doesn't know your full tax situation. Your employer knows it paid you $X. Your employer knows you handed in a W4 indicating you expect to claim Y exemptions but it doesn't know if you're actually legally allowed to claim Y exemptions. Based on your projected income considering what it knows about the tax laws for the year and the expectation that you'll likely claim Y exemptions, it withholds $Z, which might be more or less than you ultimately owe.

Your employer doesn't know if you have investments, or a trust fund, or another employer, or receive income from some state welfare program, or have a savings account, or had a kid, or got married or bought a house, or won a bunch of money on your vacation in vegas, or settled a debt causing taxable event.

All of the rules surrounding when you owe a tax return are essentially whatever congress and the IRS thought would be the best way to keep everyone honest at the time the rules came to exist. Could things be simplified from their existing state, probably. But, right now you owe a federal return if you receive income in excess of the standard deduction plus whatever exemptions you are allowed to take (because that's the level of income that would trigger a taxable income). WHY is that the rule? Because that's what congress (or the IRS if the IRS was given the authority to decide this rule) decided the minimum filing threshold should be when whatever bill this rule appeared in was passed.


But unless you file a tax return, the government doesn't know that you didn't have outside income, that you didn't claim too many exemptions on your W-4, etc. It's like asking, "Why does a teacher collect and grade student's tests instead of just assuming that all the students knew all the right answers?"

The probability that the amount withheld from your paychecks will exactly match your tax liability is pretty small. I suppose that if your taxes are complex and take you many hours to complete, and in the end that results in you getting a $5 refund, you could say, "A lot of trouble for so little money." But you don't know it's only $5 until you do all the work.


Just this year, literally the day after I filed my taxes, I got a "corrected" 1099 from my bank saying that my investment income was a little higher than they had shown on the original form. So I had to file an amended return. The end result was that I owed the government $3. It was a bunch of paperwork for $3, and I'm sure the government spent more than $3 doing the paperwork on their side. But what's the alternative? I made a mistake on my taxes once and the government came back years later and said that I owed an additional $30 in taxes ... plus $300 in interest and penalties. I figured, better to do the paperwork and pay the $3 than risk some huge penalty later.

  • Wouldn't all the other income sources also have to tell the IRS that you received income ? wouldn't it be easier for the IRS to have a simple form on their website where small employers (one time, babysitting, gardening, etc.) could enter who they paid and how much ? Wouldn't it be easier for the IRS to calculate everything automatically instead of having 300 million people do it manually ?
    – xyious
    Jun 14, 2018 at 20:09
  • @xyious One could imagine a tax system where that is possible. but it would be very complex if not impossible under present US tax law. If taxes were a flat 15% or whatever number of your income, sure, every employer could just deduct that, send it in, and be done with it. But we have a regressive tax system: the tax rate you pay is higher the more you make. So if you have two employers, both would have to know exactly how much the other is paying you. There are all sorts of things you can deduct from your income, from buying solar panels to donations to charity. So you'd have to tell ...
    – Jay
    Jun 25, 2018 at 18:13
  • ... you're employer how much you give to charity, etc. Would it then be the employer's responsibility to verify these numbers? You'd have to tell him exactly which charities you gave to, and he'd have to contact them and confirm the contribution. What if your employer is a different religion and you don't necessarily want him to know what church you give to, or he has different political views and you don't want him to know about charities with political connotations? In some cases you'd have to tell your employer about medical expenses. Do you want your boss to know you were in drug rehab?Etc
    – Jay
    Jun 25, 2018 at 18:16
  • why are you making it that complicated ? The IRS does all that. Your employer sends all the information about how much you're making to the IRS (which it already does). The IRS gets information about your donation to charity from the charity anyway.... You would only have file anything at all with the IRS if you don't take the standard deduction.
    – xyious
    Jun 25, 2018 at 18:21
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    Charities don't send lists of their donors to the IRS. Sure, I suppose you could require that for any transaction that might affect your taxes, the organization involved must submit the data to the IRS rather than the individual. Charities could be required to report their donors, hospitals to report your medical bills, home improvement companies to report energy saving projects, office supply stores report anything that might be used in a home office, etc. But that just shifts the responsibility around. And then what if they make a mistake? Could you challenge it?
    – Jay
    Jun 25, 2018 at 18:31

There is no penalty for non-filing if no tax is owed. So in your example situation, while the IRS dictates that they are obligated to file (assuming their income exceeds the minimum threshold) and their withholding was sufficient, there is no penalty for failing to do so, the IRS is happy to keep unclaimed refunds.

Unless you go through the return, you cannot be 100% certain that you will not owe, employers mess up withholding, employees put an incorrect number of allowances on their W-4, people have other income, etc. I'd argue that requiring a return gives them a more defensible position when coming after someone for non-payment, and discourages people from taking the risk of not-filing.

I'd imagine filing in most years and skipping some makes you a prime target for audit, but as I said, they're happy to keep unclaimed refund money.

Edit - Clarification and some sources:
The failure to file penalty is the lesser of 100% of tax owed and $205, so if your withholding was sufficient (no tax owed) then there'd be no penalty.

When you fail to file a return and should have, the IRS, in essence, does it for you using an SFR (Substitute for Return). This basically assumes the worst based on evidence they have, i.e. you sold stock, they assume $0 basis since they lack any other information, you had 1099 income, they assume no expenses offsetting it, etc. For most simple returns the SFR is identical to the return that would have been filed, so this triggers no adverse action since they will discover no additional tax owed.

This is at the IRS level, and for personal tax returns, partnerships/S-Corps, etc face different rules. State laws may vary.

  • Can down-voter provide feedback?
    – Hart CO
    Jun 13, 2018 at 15:23
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    I didn't downvote, but I'm not sure your first sentence is correct. It's my understanding that, federally, you owe a tax return if your income is above the standard deduction + any exemptions you are allowed to take. States may have varying thresholds of when a tax return is due. If you have taxable income, you owe a tax return, whether or not you'd get a refund is irrelevant; I think...
    – quid
    Jun 13, 2018 at 23:30
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    @quid Fair point, added some text and sources.
    – Hart CO
    Jun 14, 2018 at 0:30

Why? Because $4 million per year in lobbying by the tax preparation industry.

It's one of those situation where you assume what you live with is normal, whereas the United States is not at all normal in how the government resists making tax filing easy.

  • Why do you think tax filing is not easy, at least for most people? Only part I've ever found difficult is the capital gains exclusion computation (I usually get it wrong, but the IRS corrects it and sends me a few dollars), and I have self-employment income which in past years involved a significant fraction of foreign source income. For most people, who could just do a 1040-EZ, it seems almost trivial. Perhaps the amount the tax preparation industry spends on advertising to convince people it's difficult has something to do with it.
    – jamesqf
    Jun 13, 2018 at 4:07
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    Why do you think tax filing is something most people should have to do at all? Jun 13, 2018 at 20:37
  • Come on... Intuit (turbotax) already offers free federal filing anyway. The issue is EVEN people who derived W2 income from one employer who would only take the standard deduction anyway may have bumped in to ANY NUMBER of things that can alter their tax situation. Did you have a savings account? Did it earn any interest? That's income tat wasn't reported by your employer. People who ONLY receive W2 income from a single employer are are not the norm, and Turbotax will already handle their federal filing for free anyway. And the question has nothing to do with cost.
    – quid
    Jun 13, 2018 at 23:23
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    @quid The thing is, for the simpler returns the government already has basically all the data. What they should do is the government send you a pre-filled return, you can accept it, correct it (including by making a few corrections and letting them do the rest of it) or completely replace it. That would really hurt the low end of the tax preparation business, though, and that lobby has so far prevented it. Jun 14, 2018 at 1:58
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    @Rupert Morrish: Do you want the practical, political, or philosophical answer? As quid says, everyone has a different situation. and as long as the political powers that be keep taxing things at different rates and including deductions & exemptions, most people will not fit a simple "W2 is all I get, take X% of that" model. Even something as simple as buying a house (which the Federal government has no reason to know about) triggers different taxation. But it is easy (or fairly so - their error messages could use some work): just use the IRS's online Free Fillable Forms.
    – jamesqf
    Jun 14, 2018 at 18:27

The amount of money the government gets is based on your withholding. Depending on how it is set up you may pay too much or too little (usually a little too much so you get a refund).

You need to tell the government that you have not received income from other sources that they might not know about. That is done when you file your tax return.

In situations where your tax situation is straightforward they have tried to make it easier (such as by using form 1040-EZ instead of the regular form 1040)

However it is quite easy to end up in a situation where your tax situation becomes more complicated (e.g. you buy a home and want to deduct real estate taxes and mortgage interest from your income tax liability).

If you are not happy with the law you can contact your congressman or senator.

  • The changes in last year's reform (TCJA'17) will reduce the number of people for whom itemizing is beneficial, although not to zero, and deductions are subtracted from your taxable income before computing the tax, not from your actual tax liability. And the form is 1040 not 1080. Jun 13, 2018 at 22:06

If you don't file your taxes the only thing that could happen is the government gets more money than they should

Not true - you could have declared more exemptions on your W-4 than you should have, get less withholdings from your paycheck, and at the end of the year YOU owe additional tax.

If it were legal not to file a tax return, then people would only file when they were owed a tax refund, and would not file if they owed taxes, resulting in a net loss for the government.

  • Your second occurrence of return should be refund. Jun 13, 2018 at 22:07

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