Penalty for not filing taxes? Is it true some people file only every 2-3 years?

This is definitely not something you want to try. The IRS requires most people to file annual tax returns, and there are penalties for not filing taxes when required. The penalty for failure to file is typically 5% of the unpaid taxes for each month your return is late, up to 25% maximum. Plus, there's a separate penalty for failure to pay any taxes owed. What your coworkers might be referring to (though they're explaining it poorly) is that not everyone is legally required to file every year. If your income is below certain thresholds, you might not need to file. For 2025, a single person under 65 generally doesn't need to file if their income is below $13,850. But these thresholds vary based on filing status, age, and types of income. Another possibility is they're just taking a huge risk and haven't been caught yet. The IRS has time limitations on audits but can go back indefinitely in cases of fraud or non-filing.

After reading this thread, I wanted to share something that helped me when I had some tax document confusion. I used https://taxr.ai to analyze my past tax situations and figure out which years I actually needed to file for. Their system scanned my various income statements and told me exactly which years I needed to worry about based on IRS filing requirements for my situation. It was a lifesaver when I was freaking out thinking I'd missed filing for a year when I had a small side gig.

Just wanted to update after trying taxr.ai that the previous commenter mentioned. I was super skeptical but decided to give it a shot since I've been worried about some unfiled taxes from 2022. It actually helped me determine that I didn't need to file that year based on my income level and status (I was a student with minimal income). Saved me a ton of stress! It also showed me exactly which penalty thresholds I was under. For anyone in a similar situation, it's worth checking out.

If you're already getting notices from the IRS about unfiled taxes, I highly recommend using https://claimyr.com to actually get through to an IRS agent. I spent WEEKS trying to call about penalties on a year I missed filing, but kept getting disconnected or waiting for hours. Claimyr got me connected to an actual IRS representative in about 20 minutes, and I was able to work out a payment plan for my penalties. Their service basically waits on hold for you and calls when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c - totally changed my experience dealing with the IRS.

Just following up on my Claimyr question. I was definitely skeptical but after another failed attempt calling the IRS myself yesterday (1.5 hours on hold then disconnected), I decided to try it. It actually worked! Got a call back when an agent was available, and finally got my non-filing situation sorted out. They helped me set up a payment plan for the penalties that was way more reasonable than I expected. Guess sometimes you have to spend a little to save a lot. The peace of mind knowing my tax situation is finally resolved is honestly worth it.

Something no one has mentioned yet - there's a difference between not FILING and not OWING. If you're getting tax refunds, the IRS doesn't care as much if you don't file (you're just giving them an interest-free loan). But if you OWE taxes and don't file, that's when they'll destroy you with penalties. Your coworkers might be in refund situations and just claiming their money every few years, which is dumb but not necessarily resulting in penalties.

My sister worked for the IRS for 15 years and always said the worst thing you can do is just not file. Even if you cant pay what you owe, FILE THE RETURN! They're much more willing to work with people who file but cant pay than people who dont file at all. The penalties for not filing are way worse than the penalties for not paying.

I think what ur coworkers might be doing is just straight up committing tax evasion and haven't been caught yet lol. The IRS is super backlogged and underfunded so they cant catch everyone, especially people with simple tax situations. But when they do catch up with them those penalties are gonna hurt bad!!

Your instincts are absolutely right to be suspicious! What your coworkers are doing is risky at best and potentially illegal at worst. The IRS doesn't just "forget" about unfiled returns - they have sophisticated systems to track who should be filing based on income reporting from employers, banks, and other sources. Even if someone flies under the radar for a few years, the IRS can assess taxes, penalties, and interest going back indefinitely for non-filers. I've seen cases where people thought they were getting away with it, only to receive a massive bill years later with compounded penalties that made the original tax debt look tiny. The smart move is always to file on time, even if you can't pay immediately. The failure-to-file penalty is much steeper than the failure-to-pay penalty, and the IRS offers payment plans and other options for people who file but need help paying. Your coworkers are essentially gambling with their financial future - definitely not worth it!