The Schreiber Law Firm | Jeffrey D. Schreiber
It will demand he file returns for at least the last 10 years, or they may file returns for him, or it may refer him as a tax evader. He should consult with a good tax resolution attorney to become compliant in his tax obligations to avoid the third alternative. Make sure it is an attorney so he can have an attorney-client privilege about his discussions regarding his back taxes that he would not have with an accountant or an enrolled agent. The IRS can ask the last two what they discussed with him. And, the IRS will eventually get to him if he does not take steps to become compliant in his taxes.
Answer Applies to: California
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
Yes, this usually occurs. When a person finally files tax returns, the IRS follows up for prior years. In the most egregious situations, the IRS can bring civil and criminal fraud actions against non-filers. My recommendation in such situations is to try to file all prior year returns all at once at the same time you are filing the current year to minimize this exposure. The IRS will also assert interest and penalties on the amount due. In addition there can failure to file and failure to pay penalties, that can be 25% each. The Internal Revenue Code is stacked in such as way as you never want to get caught not filing your returns. You need to get with a tax attorney to map out a specific strategy and to get compliant with our federal tax rules.
Answer Applies to: Pennsylvania