That counterintuitive tendency to leave money on the table isn't that unusual. According to the IRS, 1.3 million individuals who failed to file a tax return in 2004 left a total of $1.2 billion in unclaimed refunds in the coffers. Half of those nonfilers would have received a refund of more than $552. Some also may have been eligible for the refundable earned income tax credit.

The slippery slope
There are perfectly legitimate reasons to delay filing, and no penalty to do so, provided you apply for an extension and pay the taxes you owe by the mid-April deadline. But failing to pay and/or file can be the first step down a very steep and slippery slope.

San Francisco CPA and former IRS agent Robert Adams has represented clients before the IRS who have slipped well down that slope. He estimates that four out of five clients with delinquent tax issues are either self-employed or have Form 1099 issues, while just one-fifth are W-2 wage earners. He says in many cases clients who fail to file continue to do so for fear of being caught and stuck with a bill they can't pay.

"I had a client who hadn't filed a tax return in 20 years. Guess what his business is? Bricklayer. Cash on the barrelhead," says Adams. That reluctant taxpayer's problem was compounded by his procrastination. If, as required by law, he filed all those delinquent returns, he would be, in Adams's words, "a dead man" because of the massive bill of unpaid back taxes plus penalties and interest.

Even wage earners, whose taxes are theoretically withheld automatically, can get in a jam.

"Typically what happens is, he gets short of cash, he goes to his employer and says, 'Change my withholding allowance from one, which I'm entitled to, to nine because I have eight kids at home,' and he doesn't have the eight kids," Adams says. "So essentially he gets no tax withheld. Then comes April 15th and he looks at his taxes and sees, oh my God, I owe $4,000. So he figures, since I don't have $4,000, I won't send in my return, because if I do, they'll know I owe $4,000 and they'll catch me."

Our tax panel happily shoots down three rationales that lead tax procrastinators into trouble.