Haven’t Filed Taxes in Years? The IRS Is Prioritizing Nonfilers—Act Now.

If you have not filed tax returns for several years, the quiet is not good news. It does not mean the IRS forgot, forgave the obligation, or ran out of time. It may only mean your case has been waiting for resources.

A new Treasury Inspector General for Tax Administration report shows that the IRS has identified a very large nonfiler inventory, including high-income cases, and is trying to improve how those cases are selected and worked. The report also shows serious delays and uneven coordination. That is not a reason to keep waiting. It is a warning that old cases remain available when the IRS has the people and systems to pursue them.

If you have not filed in a while, now is the time to get ahead of the process—and call someone who can help you determine what must be filed, what records are available, and whether the IRS has already started a substitute-for-return case.

What the IRS said

In February 2024, the IRS announced a new initiative focused on high-income taxpayers who had not filed federal income tax returns. The agency said it would begin mailing compliance alerts in more than 125,000 cases involving taxpayers who had not filed since 2017, including more than 25,000 cases involving income above $1 million and more than 100,000 cases involving income between $400,000 and $1 million.

The IRS said third-party information reflected more than $100 billion in financial activity connected with those cases. The initial notice was generally CP59, which tells a taxpayer that the IRS has no record of receiving a required return.

That public announcement mattered. It signaled that nonfiler work—especially high-income nonfiler work—was again an enforcement priority.

What TIGTA found

TIGTA’s August 31, 2026 report, Agencywide Coordination Could Enhance the IRS’s Approach to Nonfilers, examined what happened next. After exclusions, TIGTA reviewed a population of 111,566 high-income nonfiler cases.

As of June 30, 2025, 38,824 high-priority cases—35 percent of the reviewed population, involving 33,653 taxpayers—were still sitting at the first-notice stage. The IRS estimated potential assessments of approximately $15.7 billion in those cases. Potential assessments are estimates, not final tax liabilities, but the size of the inventory is difficult to ignore.

TIGTA also found 10,969 cases involving 8,853 taxpayers in a queue awaiting assignment, with estimated potential assessments of approximately $2.5 billion. By December 31, 2025, 9,463 of those cases were still in the queue, and 33,757 high-income nonfiler cases remained in first-notice status.

The report identified other operational problems. For example, 4,918 cases involved taxpayers who had already filed before the IRS issued the nonfiler notice. In many of those cases, the return took months to post; 1,433 took more than a year, and 67 percent were paper returns. That finding is a reminder to preserve proof of filing and to verify that a delinquent return actually posted.

TIGTA’s broader point was that the IRS lacked a coordinated, agencywide strategy for nonfilers. The agency generally prioritized delinquent accounts with assessed balances over return-delinquency cases, and the nonfiler steering committee had not met since September 2020. The IRS agreed with all six TIGTA recommendations.

Our assessment: the IRS’s claim that high-income nonfilers were a priority was supported, but with important context. The agency identified the cases and began sending notices. The administrative record shows that thousands of high-priority cases then stalled at the first notice or in an assignment queue. That tension does not make the cases disappear. It means the inventory can move when priorities, staffing, or automation change.

Filing now is usually less expensive than defending an IRS substitute for return

Preparing several years of delinquent returns costs money. But it is generally far less expensive than waiting until the IRS prepares substitute returns and then retaining someone to unwind the resulting assessments.

When a taxpayer does not file, the IRS can use information reported by employers, banks, brokers, payment processors, and others to prepare a substitute for return under Internal Revenue Code section 6020(b). That is an enforcement calculation—not complimentary tax preparation.

A substitute return may not reflect favorable facts the IRS does not know. Depending on the case, that can include basis, ordinary and necessary business expenses, certain deductions or credits, the correct filing status, dependents, or other information that must be substantiated by the taxpayer.

By the time the IRS begins that process, the engagement is no longer just return preparation. Someone may need to obtain the administrative file, reconstruct records, analyze the IRS computation, prepare accurate delinquent returns, respond to notices, protect deadlines, and determine whether Appeals or the United States Tax Court is the proper next step.

What began as a return-preparation engagement has now become a tax controversy—complete with additional procedural requirements, professional fees, and deadlines that do not care whether the taxpayer was busy, overwhelmed, or afraid to open the mail.

The 30-day proposal and the statutory notice are not the same thing

In the Automated Substitute for Return program, the IRS may issue Letter 2566. It is commonly described as a 30-day letter because it gives the taxpayer a limited period to respond to the proposed tax calculation. The package identifies income sources, proposed tax, penalties, and interest, and includes information about appeal rights.

That stage is important. A taxpayer may be able to file the missing return, show that no return was required, correct the IRS’s information, or request review through available administrative procedures. The specific response depends on the facts and the notice.

If the taxpayer does not respond, the IRS may issue Letter 3219, a statutory notice of deficiency—the 90-day letter. The taxpayer generally has 90 days from the notice date to petition the United States Tax Court, or 150 days if the notice is addressed to a person outside the United States. The Tax Court cannot extend that statutory filing deadline.

Ignoring the statutory notice can allow the proposed deficiency to be assessed by default. Once the case reaches that point, options may narrow, leverage may change, and the cost of fixing the problem usually rises. The cleanest opportunity to use administrative appeal rights is generally before the statutory deadline forces the dispute into a different procedural posture.

Do not assume that sending something—anything—to the IRS protects the deadline. A filed return, a protest, an Appeals request, and a Tax Court petition serve different purposes. If a notice is already in hand, the notice type and deadline should be identified immediately.

An unfiled return does not simply age out

For a filed return, the IRS generally has a limited period to assess additional tax. But when no return is filed, Internal Revenue Code section 6501(c)(3) permits the IRS to assess tax at any time. An IRS-prepared substitute for return does not start the taxpayer’s assessment limitations period.

The IRS has an internal policy that often focuses enforcement on the most recent six years of delinquent returns. That is an administrative policy, not a statute of limitations. The IRS can require more or fewer years depending on the facts and managerial approval.

Your case may not remain in the same IRS inventory forever, but the unfiled tax year remains legally available for assessment indefinitely. If the IRS does not pursue it today, it can come back much later—when records are missing, memories are worse, and resolving it is considerably more expensive.

What to do if you have years of unfiled returns

First, do not guess about what the IRS has. Obtain account and wage-and-income transcripts and identify which years the IRS considers missing. If you previously mailed a return, confirm that it posted and locate proof of mailing or delivery.

Second, reconstruct the returns correctly. Third-party transcripts are a starting point, not a complete return. Brokerage basis, business expenses, cost records, estimated payments, carryovers, dependents, and state filing obligations may require separate documentation.

Third, triage any notice already issued. A CP59, Letter 2566, and Letter 3219 require different responses. Put the response date and any petition deadline on the calendar immediately.

Fourth, file accurate original returns before the IRS’s proposed calculations become final whenever the facts and procedure permit. Filing does not erase tax, penalties, or interest, but it restores your facts to the computation and allows payment or collection alternatives to be evaluated from the correct liability.

Finally, do not let fear make the decision. Delay usually reduces options and increases the amount of reconstruction and controversy work required.

The bottom line

Contact us if you have unfiled returns. It is almost always less expensive to prepare the returns correctly now than to pay someone later to defend you against the returns the IRS prepared without you. File while you still control the facts, the documentation, and the administrative path forward.

We left the IRS. You’re welcome.

Sources

Treasury Inspector General for Tax Administration, Agencywide Coordination Could Enhance the IRS’s Approach to Nonfilers, Report No. 2026-308-047 (Aug. 31, 2026): https://www.tigta.gov/sites/default/files/reports/2026-08/2026308047fr.pdf

Internal Revenue Service, What to expect after receiving a non-filer compliance alert notice and what to do to resolve (Feb. 29, 2024): https://www.irs.gov/newsroom/what-to-expect-after-receiving-a-non-filer-compliance-alert-notice-and-what-to-do-to-resolve

Internal Revenue Manual 5.18.1, Automated Substitute for Return: https://www.irs.gov/irm/part5/irm_05-018-001r

Internal Revenue Code § 6501: https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title26-section6501

United States Tax Court, Petitioners: Starting a Case: https://www.ustaxcourt.gov/petitioners-start/

Disclaimer: This article is for general informational purposes only and is not legal or tax advice. Filing requirements, available procedures, and deadlines depend on the taxpayer’s facts and the notice issued.