It a federal crime to willfully fail to file a required federal income tax return with the intent to avoid a tax owed.   Taxpayers who fail to file (“non-filers”) are well advised to file accurate returns before IRS Special Agents from the Criminal Investigation division decide to pay a visit.

A taxpayer can file returns pursuant to the IRS domestic voluntary disclosure program.  The taxpayer must initiate contact before the IRS learns of the noncompliance.  The contact must be overt and the disclosure must be timely and complete.  This “noisy disclosure” does not 100% guarantee immunity, but it is a critical factor in whether a case will be referred for prosecution.

The taxpayer can also make a “quiet disclosure” by simply filing the missing returns, preferably with payments.  A quiet disclosure offers some anonymity, but offers no assurance against later prosecution.

With the increased enforcement of failure to file cases, non-filers are advised to meet with a qualified tax professionals to determine the potential civil or criminal exposure.

If you have questions about your unfiled tax returns, contact Brian J. Crepeau at bcrepeau@rosenbergmartin.com or 410.649.4981.