If you have a return coming do you have to file?

Answer 1

A "return" is a set of forms, like Form 1040, which you fill out and send to the tax agency.

A "refund" is money that the tax agency sends you if you paid too much tax.

I assume you meant the question to be "If you have a REFUND coming do you have to file?"

The law requires anyone who has gross income over a certain amount to file a return whether or not they owe any additional tax and whether or not they have a refund coming. Someone may have told you that there is no penalty if they owe you money and you don't file. There is no civil penalty if this turns out to be true, but the law establishes certain criminal penalties (including up to a year in jail) that apply if you willfully fail to file a return. These penalties apply even if you have a refund coming. However, it is true that these are only enforced in extraordinary circumstances.

You may be wondering why the heck would they care if I don't want to claim my refund?

The nature of our tax system is that both you and your buddy might be working exactly the same job, exactly the same hours, and get exactly the same pay. You might be owed a refund, but your buddy might owe the taxman several hundred or even several thousand extra dollars.

The tax that's taken out of your pay does not represent the actual amount of tax you owe. It is at best a crude estimate based on the extremely limited amount of information that your employer gets based on what you wrote on your W-4 form (if you even bothered to file one). Your employer has no idea about all of the other factors in your life that determine exactly how much tax you really owe. He doesn't know how much you give to charity, how much tuition you can deduct, whether your parents can claim you as a dependent, whether you sell stuff for a profit on eBay, whether you have a second job or a summer job somewhere else, whether you put money into an IRA, whether you are paying alimony to an ex-wife (or receiving it from an ex-husband), whether you have a handyman gig on the side, whether you are getting a bit of interest from your savings account at the bank, and a million other factors that go into determining how much tax you really owe.

And the IRS doesn't really know whether you are entitled to a refund or you are supposed to be paying them more money. Sure, some of your income is reported on a W-2 or a 1099, but there are a lot of sources of income that are not, but you still have to pay tax on them. And they certainly don't know stuff like how many children you are supporting. So they ask you to fill out a form every year, where you show your calculations to determine how much tax you should owe and you sign a statement under oath that this is an accurate representation of your income and your taxes.

But, seriously, how do you know that you have a refund coming if you haven't filled out your tax forms??? And if you have filled them out to see that you have a refund coming why don't you just send them in and get yourself some money from the government? If you don't need it, there are a lot of charities you could help out. If you don't file, you will not get the refund you have coming to you. (Most state tax forms even have a list of charities that you have your refund sent directly to.)