a good friend of mine hasn't filed federal income taxes in 3 years.?

No problem if he actually is due a refund (why he would not claim money that is his I have no idea, but him baing an idiot obviously isn't at debate here). If he owes, he ought to be worried. He has no idea one way or another unless he actually does his return.

There are no penalties if a refund is due the taxpayer. Penalties and interest apply to amounts owed only.

Any penalties and interest are based on an amount due. There is no penalty for failure to file if the taxpayer is due a refund.

However, you can only file a claim for refund for three years after the due date of the return. For 2008 returns, the last filing date is April 15.

The due date for the 2011 return is April 17 this year (Sunday and a holiday). However, the rule for limitations on filing for a refund talks about three years. It's gone both ways in rulings, but the IRS has been known to hold to a due date of April 15 in situations like this. He should file 2008, but might be rejected.

If he doesn't file a federal return within 3 years of the due date of the return, any refund he might have coming is lost. His 2008 refund will disappear in 2 days. So it's to his benefit to get those returns filed right away. Even if he owes, the longer he waits, the more he owes.