We have tailored our approach to non-filers by asking - what's the bare minimum of filing you need to do? - rather than just outright assuming that we should file every year. If the IRS isn't looking for you and you are only getting refunds the last three years - why file more than that? On the other hand - if you are going to owe the IRS- there are some instances where filing lots of tax years is beneficial particularly if the result is going to be an Offer in Compromise.
Let's illustrate two completely different approaches which are based on your age and whether you are an employee or self-employed:
28 Year Old - Has Never Filed Before
Eva - a young person - 28 - hasn't filed Federal returns since she left college. She has worked odd jobs in the last seven years. She hasn't heard from IRS and now needs to file a return to be in compliance to get her Healthcare credits. In her case: UNLESS the IRS is asking her to do so, doing more than the last three returns (2013, 2014 and 2015), is "over-kill." She wouldn't be getting tax refunds on returns older than 2013 and after researching her IRS record realize that the IRS isn't looking for them. After filing the returns, she gets refunds and assurance that she doesn't have to look in the rear-view mirror for IRS anymore.
55 Years Old - Self Employed Plumber - Hasn't Filed in 20 Years
William, a 55 year old one-man-show plumber, has been working his tail off for decades but hasn't filed Federal Tax Returns in that time. He hasn't saved a lot - he's just making ends meet - has minimal assets and with retirement looming hasn't contributed to his Social Security as self-employed people are required to do. We determine that William will probably be able to settle his IRS tax debt for a low amount regardless of what he owes. The huge bonus of doing this for him? He restores his social security credits by settling his debt with the IRS! That's a huge victory securing some retirement funds for himself while getting clear with the IRS.
