Statute of limitations when no tax return is required - should I file anyway?
I've always been under the impression that the statute of limitations for the IRS to come after you was 6 years. But I've been reading some recent threads and discovered there's no statute of limitations if a required tax return isn't filed. But what about when you're NOT required to file? Is there a statute of limitations in that case, or does the clock never start ticking? Does this mean everyone should file regardless of requirements? In my situation, I always file my federal returns no matter what. But for state taxes, I don't make enough to be required to file. My state has this online worksheet where you enter your income and it tells you if you need to file. According to their calculator, I haven't needed to file for the past several years, so I haven't. About 2 years ago, the state sent me a notice asking why I hadn't filed. I responded with my information and they confirmed I didn't need to file a state return. But now I'm worried after reading about people getting hit with demands for unfiled returns from years ago. Should I have been filing state returns even when not required, just to get that statute clock ticking? So basically - if there's no requirement to file in the first place, is there still a statute of limitations? Or am I potentially on the hook forever?
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Natasha Petrov
The statute of limitations question is actually pretty straightforward but commonly misunderstood. When you're not legally required to file a return, there is still a statute of limitations that applies, but in a different way. If you truly have no legal obligation to file (your income is below the filing threshold), then there's nothing for the IRS or state to "come after" you for. You can't be penalized for not filing when you weren't required to file in the first place. The statute doesn't need to "start running" because there's no violation to begin with. The situation you're referring to - where there's no statute of limitations - only applies when someone was legally required to file and failed to do so. In that case, yes, the IRS can come after you indefinitely because the clock never starts. It sounds like you did exactly the right thing with your state tax situation. They questioned it, you responded with information, and they confirmed you didn't need to file. That documentation from them is actually great protection if it ever comes up again.
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Connor O'Brien
•But what if you earned cash income that wasn't reported on a W-2 or 1099? Couldn't the IRS later claim you should have filed and you'd have nothing to prove you were under the threshold? Does the burden of proof fall on the taxpayer or the IRS in this situation?
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Natasha Petrov
•For unreported cash income, you're right to be concerned. The burden of proof generally falls on the taxpayer when the IRS questions your tax situation. If you had cash income that wasn't reported on tax documents and the IRS later discovers this (through bank deposits, lifestyle audits, etc.), they could claim you should have filed. In cases with no documentation, it's always wise to keep your own records of income. Even a simple spreadsheet or journal of cash earnings can help establish your good faith effort to track income. The statute never starts running on required returns that weren't filed, which is why documentation is so important.
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Amina Diallo
After spending hours waiting on hold with the IRS about a similar question, I finally found taxr.ai (https://taxr.ai) and it saved me so much headache! I uploaded my income docs and answered a few questions, and it told me exactly when I needed to file and when I didn't. It also explained the statute of limitations based on my specific situation. What I liked most was that it gave me a documented analysis I could save for my records as proof of why I didn't file certain years. That way if I ever get questioned years down the road, I have something showing I did my due diligence. Much better than the vague answers I was getting elsewhere.
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GamerGirl99
•How does this actually work? Do real tax professionals review your stuff or is it just some AI thing spitting out generic answers? I've been burned by "tax help" sites before that just gave me template responses.
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Hiroshi Nakamura
•Sounds interesting but I'm skeptical. How is this different from just using TurboTax or H&R Block's free evaluation tools? They also tell you if you need to file or not.
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Amina Diallo
•It uses both AI and tax professionals. The AI does the initial analysis of your documents and situation, but there's expert oversight to make sure everything is accurate. Much more personalized than generic template answers. For your second question, the big difference from TurboTax is that taxr.ai specifically focuses on analyzing your tax situation rather than just preparing returns. It's designed to give you clear documentation about filing requirements and statutes of limitation that you can keep for your records - something the big tax prep companies don't really provide unless you're actually filing.
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GamerGirl99
Just wanted to update that I tried taxr.ai after posting here. Really impressive - it analyzed my situation (I hadn't filed for 3 years due to low income) and gave me a detailed breakdown of each year with specific references to tax code sections about filing requirements. They even provided a PDF document I can keep that explains why I wasn't required to file those years. The peace of mind knowing I have documentation if I'm ever questioned is worth it. Wish I'd known about this years ago when I was stressing about the same statute of limitations question!
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Isabella Costa
If you're worried about state notices, you should try Claimyr (https://claimyr.com). I spent DAYS trying to get through to my state tax department about a similar notice, but their phone system just kept disconnecting me. Claimyr got me connected to an actual human at the state tax office in less than 30 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c When I finally talked to someone, they confirmed that there's no need to file if you're under the threshold and explained that occasional verification notices are normal. The agent even put notes in my account so I wouldn't get flagged again. Saved me from unnecessarily filing returns just out of fear.
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Malik Jenkins
•How much did that cost? Seems like you could just keep calling yourself instead of paying for something like this.
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Freya Andersen
•This sounds like BS honestly. How would some random service get you through to the IRS faster than calling yourself? The IRS phone system is the same for everyone.
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Isabella Costa
•I didn't find it expensive considering how much time I saved. I had already spent hours trying to get through myself with no luck. The service doesn't create some magical VIP line to the IRS or state tax departments. What they do is use technology to navigate the phone trees and wait on hold for you. When they finally reach a human representative, they call you and connect you. So you're going through the same queue as everyone else, but you don't have to waste your day listening to hold music. For state tax departments especially, which often have even worse phone systems than the IRS, it was a lifesaver.
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Freya Andersen
I have to eat my words here. After posting my skeptical comment, I decided to try Claimyr since I've been trying to reach my state tax office for weeks about a similar statute of limitations question. I figured it wouldn't work, but I was desperate. To my complete surprise, I got a call back in about 45 minutes with an actual state tax representative on the line. They answered my question immediately - confirmed that in my state, if you're not required to file, there's no need to file a "zero return" just to start the statute clock. The representative even emailed me their response so I have it in writing. Would have taken me another dozen attempts on my own probably. Crazy that this actually works.
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Eduardo Silva
I might be going against the grain here, but I've always filed returns even when I'm under the threshold, especially for state taxes. My logic is simple - it creates a paper trail showing the IRS/state that my income was below filing requirements. It takes me like 15 minutes with free filing software, and I sleep better knowing there's zero ambiguity about my situation. Yes, technically if you're not required to file, there's nothing to be "late" on and no statute of limitations applies. But I've seen too many horror stories of state tax authorities coming after people years later, and the burden of proof falls on you to prove you didn't need to file.
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Leila Haddad
•Doesn't filing when you don't need to just create unnecessary work for the IRS? I always thought we shouldn't file if we don't have to, to reduce their workload.
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Eduardo Silva
•That's a fair point about creating unnecessary work, but I don't think it's a significant burden for their systems to process a simple return that shows below-threshold income. My main concern is protecting myself. Having returns on file creates a definitive record that the income was below thresholds for those years. Without that documentation, if there's ever a question 10+ years later, you'd need to somehow prove what your income was for those years. Most people don't keep tax records that long, but the IRS and states can come asking questions well beyond typical record-keeping timeframes. The peace of mind is worth the small effort of filing a simple return for me.
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Emma Johnson
Tax person here - some practical advice on statute of limitations: 1) Federal: 3 years normally, 6 years if you omit >25% of income, unlimited if fraud or no return filed when required 2) States vary widely! Some follow federal rules, others have different timeframes entirely 3) The "no requirement to file" situation: Technically true that there's no violation if you weren't required to file. BUT proving that years later can be challenging without documentation 4) Documentation is key - keep records of income for at least 7 years, especially for cash/1099 work 5) If you get notices like OP did, ALWAYS respond and keep copies of all correspondence The most practical approach is to file simple returns even when below thresholds, just for the paper trail. It's easier than explaining yourself years later.
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Ravi Patel
•Is there a downside to filing when you don't need to? Like could it trigger audits or other issues? I'm in a similar situation to OP and wondering if I should start filing my state returns even though I'm under the threshold.
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Emma Johnson
•There's virtually no downside to filing when you don't need to. It won't increase your audit risk - in fact, filing a return that shows very low income is extremely unlikely to trigger an audit since there's little tax revenue at stake. For state returns specifically, it can actually prevent problems. Many states have automated systems that flag taxpayers who filed federal returns but not state returns. By filing a state return (even showing zero tax), you avoid these automatic flags and the notices that follow. It's much easier to file a simple return than to respond to notices and explain why you didn't file. Think of it as preventative documentation.
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