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You're in Trouble if You Don't File a Tax Return

You will have big IRS problems when you do not file a tax return. Statutes of limitations and timelines are provisioned by the Tax Code so the IRS can pursue nonfilers.

Criminal: Criminal charges may be brought against you within 6 years of the tax return's deadline.

Civil: Civil penalties may be demanded from you without a time limit, so interest and penalties will be escalating on your tax debt forever.

IRS Policy: After 6 years from the tax return's deadline,

the IRS don't normally go after nonefilers.

It's a crime to owe taxes and not file a tax return. You may be fined up to $25,000 per year or sentenced to a year in prison for each unfiled year.

There is no criminal charge if you owe taxes but filed your tax return. Your unpaid taxes will be subjected to penalties and accrue interest, though.

Nonfilers are pursued through:

Tax returns you've filed are matched against information documents in something called Computerized Information Returns Program (IRP). If no tax return is found, a Taxpayer Delinquency Investigation (TDI) is initiated. You will start receiving IRS notices, phone calls, and missives until ultimately a revenue officer will start searching for you.
Other methods will be tried if you do not respond to one of the 4 ways used to notify you:

Written notice from Service Center - 3 in sixteen weeks A taxpayer service representative will call you and give you a deadline.

Call or visit from a revenue agent or officer - deadline and offer to help file your returns will be given (Note: It's legal for the IRS to prepare your returns.)
You're undergoing a criminal investigation if you're visited by a special agent.

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