I hear this more than you'd think: 'I haven't filed in years. Is it too late?' No. It's not too late. But the longer you wait, the more they take. The IRS doesn't forget. They just get more aggressive.
What Happens When You Don't File
The IRS files a substitute return for you. It's called an SFR. They give you single filing status, no dependents, no deductions. The tax bill is often higher than what you would owe on a properly prepared return. Then they start collection: liens, levies, garnishments.
How Many Years to File
The IRS typically requires the last six years of returns to be filed before they'll work with you on a resolution. Sometimes less. I figure out exactly which returns need to be filed and prepare them for you.
The Benefits of Coming Forward
Filing voluntarily is always better than waiting for the IRS to come to you. Voluntary compliance shows good faith. It opens the door to penalty abatement. It stops the substitute return process. And it lets us negotiate from a position of strength instead of desperation.
Criminal Exposure
In extreme cases, willful failure to file is a crime. This is rare, but it happens. If there's any criminal exposure, attorney-client privilege becomes critical. The CPA and enrolled agent privilege under IRC 7525 does not reach criminal matters.