Fail to File Tax

When you fail to file tax with the IRS, you may be assessed a penalty for failing to file income tax return. If you fail to file federal tax returns, the IRS will first inquire of your failing to file taxes before a penalty for failing to file income tax return is assessed.

How does the IRS know if I fail to file tax?

The IRS has powerful computers that use informational returns to match the income tax returns to the people who must file taxes. This is to ensure that everyone who is required to file tax returns does file. However, there are many people who are required to file taxes, have high income, but fail to file federal tax returns year after year. For these people, there is a penalty for failing to file income tax return.

What happens if I fail to file tax returns?

If the IRS identifies that you failed to file federal tax returns, the IRS will start the Tax Delinquency Inquiry (TDI) process on your failing to file taxes. Following the Tax Delinquency Inquiry (TDI) process, the IRS will issue a notice asking you to either:

• file the tax return or
• explain why you are not required to file tax returns.

I did not fail to file tax returns but the IRS accused me of failing to file, what do I do?

If you fail to file tax returns, you should file it immediately. However, if you did not fail to file tax returns but the IRS thinks you failed to file federal tax returns, you will receive a notice from the IRS as stated above. You then need to dispute the IRS notice and challenge the information the IRS has. You do not need to pay the back taxes if you believe that you do not owe them. Instead, you must write letters and formally dispute the IRS' stance. We discuss how to dispute the IRS tax information and their accusation of your failing to file tax returns in other section on this IRS Audit website.