Can someone go to jail for not filing taxes with the IRS?

Question

The only income received was from a regular job where taxes were deducted through payroll deductions.

Have not filed for 6 years and the only income received was from a regular job where taxes were deducted through paycheck...

Answer 1

Absolutely NOT! Failure to file is a Civil infraction, not a criminal one. Fraud or understatement of tax can have criminal penalties.

Here's how the process works when one fails to file: IRS matches up all reports of income (W-2s, 1099s, etc) via computer and creates a substitute for return (SFR) based on standard deduction, no dependents and so on, that is in the least advantageous form for you. The tax on the SFR is compared to the withholding. If the result is that you owe, you will certainly hear from them demanding that you file (and pay). If the result is a refund, a human inspects your prior returns to see if there is reason to believe that there is other income besides that reported. Again you might receive a demand letter for a return. I have seen no consistent pattern with demand letters in situations where a refund was probable.

Absence of a demand letter does not mean that you do not owe for a tax year. You may have moved and their only obligation is to send mail to your last known address.

Now for the good news/bad news: The good news is that, in my experience, people in your scenario tend to have refunds coming back. The bad news is, that for tax years 2003 and earlier the statute of limitations for refunds (3years) has expired, so those refunds have been forfeited. (The statute of lim for IRS to collect is 10 years and does not even start to run until you file).

Now, jail is not the reason you WANT to file. Here are some better reasons:

1.Possible refunds
2. Filing makes home purchase possible: mortgage lenders usually verify income (with your permission) with IRS.
3. Other government benefits hinge on whether you have filed (student loans,for ex.)
4. You feel better about yourself-- the very question you asked here indicates some fear.

Contact a local tax professional (NOT one of the chain preparers) who can advise you of the best approach to clearing this up.

You have been living under the radar long enough; come up into the sunshine.

Good luck!

Answer 2

Yes it's possible, but highly unlikely under the circumstances you describe - the only people who go to jail are usually the ones who owe a lot and refuse to file or pay.

You still need to file the overdue returns, since otherwise if you owe, penalties and interest are accumulating and it can end up costing you a lot. They probably wouldn't put you in jail, but would seize your assets if you didn't pay.

The fact that they haven't come after you already might indicate that you really had a refund coming rather than owing anything. If you do, you can still get it for tax years 2004 and later if you file.

The fact that they took out taxes doesn't say whether you still owe or not - for any year where they didn't take out enough, you'd owe the extra. If they took out too much, then you'd get it refunded, except anything farther back than tax year 2004 is lost because it's too late for you to collect it.

Answer 3

Since your taxes have been paid through deductions, it is unlikely that your not filing will result in a jail term. However, you are required to file returns because the deductions may not be enough to cover your tax liability. More likely, by filing you would have gotten a refund. It all depends on how much was deducted, which depends on the W4 form you filed with your employer.

It is stupid not to file a return. I know a person who would have gotten an $800 refund but was too lazy to file a return.

Talk to the IRS and tell them you have not filed for a number of years and ask them for your best course of action.

Answer 4

This Site Might Help You.

RE:
Can someone go to jail for not filing taxes with the IRS?
The only income received was from a regular job where taxes were deducted through payroll deductions.

Answer 5

In theory yes, but that is a last resort. You have to try REALLY HARD to get sent to prison for not filing.

Most likely what is happening in your case is that the IRS has figured out that they actually owe YOU money, not the other way around. When that happens, although there is a technical violation of the law, the IRS does not pursue the issue.

Your "penalty" in this case is the loss of any refunds you may have had coming to you. You have 3 years from the filing deadline for the tax year in question to claim any refund due. Once that deadline passes, you lose your money forever.

There is still time to get any refunds from tax years 2004, 2005 and 2006. Any refunds owed to you from 2003 and earlier are forever lost now.

It's YOUR money, so why don't you file and get it?? If you think it's too much work, I'll happily prepare your returns for you if you give me the refund money. (I'll donate it to charity if you care to take me up on that offer.)

Answer 6

I'm not an expert, but they will only put you in jail if they feel that you are avoiding paying your taxes or otherwise committing some kind of fraud. If you have W2's get your forms online at irs.gov and get started, if you don't have any complicated forms to fill out, it will only take you a couple of hours. 1040EZ's are super fast and EZ. Just do it and you won't have to worry about it anymore.

If you owe, they will slap you with interest and penalties and you will be paying the piper big time.

Answer 7

Yes. You must file a tax return.

Answer 8

Thank you! Extremely informative and it gives me better knowledge on this subject

Answer 9

Yeah. Al Capone did.

Answer 10

Valuable topic, just what I was looking for.