Filing Compliance

IRS Definition

Taxpayers failing to file tax returns due will be requested to prepare and file all such returns except in instances where there is an indication that the taxpayer’s failure to file the required return or returns was willful or if there is any other indication of fraud. All delinquent returns submitted by a taxpayer, whether upon his/her own initiative or at the request of an IRS representative, will be accepted. However, if indications of willfulness or fraud exist, the special procedures for handling such returns will be followed.

Where it is determined that required returns have not been filed, the extent to which compliance for prior years will be enforced will be determined by reference to factors ensuring compliance and evenhanded administration of staffing and other IRS resources.

Factors to be taken into account include, but are not limited to: prior history of noncompliance, existence of income from illegal sources, effect upon voluntary compliance, anticipated revenue, and collectibility, in relation to the time and effort required to determine tax due. Consideration will also be given any special circumstances existing in the case of a particular taxpayer, class of taxpayer, or industry, or which may be peculiar to the class of tax involved.

Normally, application of the above criteria will result in enforcement of delinquency procedures for not more than six (6) years. Enforcement beyond such period will not be undertaken without prior managerial approval. Also, if delinquency procedures are not to be enforced for the full six-year period of delinquency, prior managerial approval must be secured.

More from H&R Block

If you have unfiled tax returns, the IRS usually only requires individuals to file returns for the past six years to be considered in filing compliance. Businesses, however, are required to file all unfiled tax returns.

Filing compliance is important because you will need to be in filing compliance before the IRS will work with you on payment arrangements if you owe the IRS.

The tax law requires you to file a tax return if you meet the filing requirement threshold. The threshold usually changes each year.

If you file a tax return late and you owe a balance on the return, you will be required to pay a failure to file and failure to pay penalty. If you do not have a balance due, you will not have to pay a penalty. However, if you have a refund for a tax year, you must file a return within three years of the date the return was due to be able to claim your refund.

Learn how to file back tax returns.