Non-filers — folks who habitually decline to file Federal tax returns— fall into two broad categories:
- Those who have significant income withheld by an employer, and figure they don’t have to file because the IRS will probably owe them.
- Those that hope to fly under the radar for their entire lives.
The first group is actually kind of common. After all, maybe they will get around to getting caught up next month or next year. No big hurry, the IRS owes them. Right?
Wrong: The IRS seems to ignore them. In actuality, IRS computers have compiled all the W-2s and 1099s and calculated that the government is getting a free loan! But it can get even better for the Government! The statute of limitations will run 3 years after the due date of the return and the taxpayers will no longer be able to claim their refund.
Yea, free money for the government.
What about the second group, those guys that are flying so low that nary a ping hits the IRS monitors? If you live in a lean-to in the wilderness as a hunter-gather all your life, that will work. But for the rest of us, forget it. The IRS is getting better every year at searching through public databases looking for information on people making money and then checking their database of returns filed. It’s just not hard to see this software continuing to improve its ability to crawl through websites and matching information found with returns filed.
Bottom line – Getting by as a non-filer for your entire life is just not likely to work. Filing returns can be stressful for some, but it doesn’t hold a candle to the problems of dealing with IRS Collections people knocking on your door.
If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email email@example.com.