Nicole Ofstein's Tax Blog

Tax Resources

I don’t remember the last time I filed a tax return. Should I stay in hiding and hope the IRS forgot about me?

No. It is time to come out of hiding. You have little chance of escaping IRS detection forever and that is what you would have to do. If a tax return has not been filed, the statute of limitation for that particular tax year has not yet started. This means that there is no limit to the amount of time that the IRS can pursue you. Plus, if the IRS catches you, they may charge you additional penalties and/or criminally prosecute you, particularly if your delinquent returns involve sizable taxable income. Not paying the IRS is a civil matter; however, failure to file is a misdemeanor under IRC 7203 and may in egregious cases be elevated to a felony under IRS 7201 Tax Evasion.

In addition, if you don’t file, the IRS may file a “SFR” tax return for you. SFR stands for Substitute for Return, which essentially means that this is the IRS version of your un-filed tax return. SFR returns are filed in the best interest of the government, which means that the only deductions you’ll see are standard deductions and one personal exemption. You will never get credit for other deductions for which you may be entitled. And once the IRS files the assessment on this SFR, they will begin collection efforts