I represent taxpayers in Leander and the rest of Texas who have civil and criminal tax issues, and have recently seen an uptick in those folks coming to us who have not filed tax returns, some for many years. In fact, the non-filer is a major priority for the IRS, who have stated publicly that they have identified more than 7 million taxpayers who have failed to file returns, and that the IRS plans to roll-out an initiative to target these tax scofflaws.
In addition, it is worth noting that the willful failure to file a tax return is a federal tax crime under the Internal Revenue Code's Section 7203.
So what can non-filers do, and how can we help them get their tax return issue resolved with the IRS? It depends upon why they failed to file in the first-place.
If the failure to file the tax returns was a lack of money (e.g. they realized they would be unable to pay the tax liability reflected on the tax return and so chose not to file) then we can get those returns filed and begin working on a tax resolution for them to resolve the back tax balance, including Installment Agreement, Offer-in-Compromise ("OIC"), or have their account placed in uncollectable status.
If the taxpayer's failure to file was intentional and for other reasons, such as cash payments to undocumented workers, then the way to resolve the issue and avoid a criminal tax referral is by utilizing the IRS's Voluntary Disclosure program. By doing a voluntary disclosure the taxpayer can come in and disclose the issue without fear of a criminal tax referral.