Updated November 2026 · VG CPA PC advisors
How many years to file
IRS policy generally requires the last six years of delinquent returns to be filed to be considered in good standing, though the IRS can require more. Gather wage and income transcripts from the IRS to see what was reported under your Social Security number, and use bank records to reconstruct business income and expenses.
Refunds can only be claimed within three years of the original due date, so older refunds are lost. Balances, by contrast, never expire until assessed and collected.
Substitute for return
If you do not file, the IRS can prepare a substitute for return using only the income reported to it, with no deductions, credits or dependents except the standard deduction. The result is usually a much higher tax. Filing your own original return generally replaces the substitute assessment.
There is no statute of limitations on assessment for years when no return was filed, so unfiled years stay open indefinitely.
Penalties and coming forward
The failure-to-file penalty is 5% of the unpaid tax per month, up to 25%, and is the largest penalty for most nonfilers. Failure-to-pay penalties and interest add more. First-time abatement or reasonable cause can reduce penalties for some years.
Criminal prosecution for failure to file is rare for people who come forward voluntarily, but it is a real risk for willful nonfilers with significant income who wait until the IRS finds them. If there are foreign accounts or substantial unreported income, talk to a representative before filing.