What to do if you’ve never filed taxes? Guide for US citizens, expats, and Green Card holders
Not everyone who never filed taxes actually had a filing obligation. The IRS decides who must file based on clear rules for each tax year. Filing obligation depends on income level, filing status, self-employment, and dependency status.
Common cases where people weren’t required: students with low income, dependents, short-term or foreign income confusion.
NOTE! “No tax owed ≠ no filing required”
When you’ve never filed taxes, it can feel scary. But the first step is simple. Check the IRS rules for each year before you panic.
Decision check:
You might not have needed to file a tax return if:
- your income was below that year’s IRS filing threshold (it changes every year),
- you didn’t have enough self-employment income to require filing,
- you qualified as someone else’s dependent under IRS rules, or
- none of the special situations that require filing applied to you.
For many Americans, including expats and green card holders, a calm review of the IRS filing rules is the first move if you never filed taxes. Taxes for Expats has supported 2,200+ Americans living abroad through this process, so contact us and start resolving it today.
What if you never file taxes?
Most Americans who fall behind on filing imagine the worst, but the IRS usually starts with mailed notices and a steady process that encourages people to file on their own. The moment “I’ve never filed taxes in my life” becomes a real concern, the first step is to look at each year and see whether any tax was actually owed.
When tax is owed,
- the failure-to-file penalty is generally 5% of the unpaid tax per month (up to 25%),
- plus a failure-to-pay penalty generally 0.5% per month (up to 25%), and
If both apply in the same month, the IRS reduces the failure-to-file penalty so the combined rate is typically 5% total (4.5% late filing + 0.5% late payment).
A return more than 60 days late can trigger a minimum late-filing penalty of up to $525 (for returns required to be filed in 2026) – so filing sooner usually keeps these amounts from growing larger.
| Situation | Likely outcome |
|---|---|
| No tax owed | Usually minimal or no penalties |
| Tax owed | Penalties may apply |
| Many unfiled years | IRS may request compliance |
| Fraud or hiding income | Higher risk (rare cases) |
The IRS time limit (IRS statute of limitations) doesn’t start until a return is filed, which simply means the IRS clock to assess tax for that year usually does not begin while the return is still missing.
NOTE! Jail is rare in nonfiler situations because criminal cases generally involve willful fraud or clear efforts to hide income, while most nonfiling cases are treated as civil matters that the IRS works through step by step using its normal collection process.
I’ve never filed taxes – what do I do now?
Fear will not solve this, and when you have never filed taxes, the best move is to take clear and actionable steps that make you regain control.
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Identify which years are missing
Write down each tax year where no return was filed, then confirm the gaps using IRS transcripts or a verification of non-filing letter. The IRS can assess tax at any time when no valid return was filed, so knowing the exact years gives you control of the timeline. -
Gather income records
When you’ve never submitted a tax return, start with an IRS wage and income transcript to see the W-2 and 1099 forms that were reported under your Social Security number. Then add any other proof of income you have, such as bank or brokerage statements, and request copies from employers or payers if something is missing. -
Determine tax vs reporting exposure
Separate what you may owe in actual tax from possible reporting issues, so you understand the full picture before filing. Late returns can trigger penalties and interest under IRS rules, and offshore reporting gaps may carry their own consequences, so this step is about clarity, not panic. -
Choose the right compliance path
Being a US citizen living abroad, never filing a tax return usually involves offshore reporting, which means the solution is sometimes more than just sending in old returns. Taxes for Expats has been helping clients use the IRS streamlined procedures since 2012 and has assisted over 2,200 US expats through this process, which generally requires the most recent 3 years of tax returns and 6 years of FBARs for eligible non-willful taxpayers, while other cases may use delinquent FBAR or delinquent international information return procedures. -
File voluntarily (before IRS contact)
File before the IRS contacts you, because once they reach out, your options can change. As Wendy Christiansen, CPA and tax supervisor at TFX, explained in her Streamlined Procedure webinar: “The biggest thing is to do this before the IRS comes to you. If the IRS reaches out first, you may no longer be eligible.”
How to file taxes if you’ve never filed before
What to do if you have never filed taxes is simple at its core: start with the most recent year, get your IRS transcripts, and then work backward step by step – the outline below turns confusion into clear action.
| Question | Short answer |
|---|---|
| How many years to file? | Usually, the most recent 3–6 |
| Can I e-file? | Often no for older returns |
| Do I need all documents? | Income records are key |
| Should I file quietly? | Risky in some situations |
Step 1: The IRS generally expects the last three to six years of returns to be filed, so begin with the newest year and then move back one year at a time if you never filed taxes and want to become compliant.
Step 2: Log in to your IRS account and download your wage and income transcript so you can see your W-2 and 1099 information in one place – this gives structure and clarity when you’ve never filed taxes before.
Step 3: Understand how to send the return – as of today, the IRS MeF system accepts e-file for 2025, 2024, and 2023, and returns older than that are usually mailed on paper.
Step 4: For most people, Form 1040 is the main return. From there, the extra forms depend on your situation:
If you’re not an expat (US-based, no foreign accounts/income):
- Form W-2 and/or 1099s (these aren’t “forms you file,” but they’re the income records your return is built on)
- Schedule 1 (extra income like unemployment, side income, some deductions)
- Schedule B (interest/dividends — often required if you have them)
- Schedule C + Schedule SE (self-employment / freelancing income and self-employment tax)
- Schedule D + Form 8949 (stocks/crypto sales and other capital gains/losses)
- Schedule E (rental income, royalties, some pass-through income)
- Form 8812 (Child Tax Credit / Additional Child Tax Credit, if applicable)
- Form 8962 (Premium Tax Credit reconciliation if you had Marketplace health insurance)
If you are an expat or have foreign income/assets (add only if relevant):
- Form 2555 (Foreign Earned Income Exclusion)
- Form 1116 (Foreign Tax Credit)
- Form 8938 (FATCA reporting for certain foreign financial assets)
- FinCEN Form 114 (FBAR) (foreign accounts over the reporting threshold)
Step 5: File the newest return first, then go backward year by year, because:
- The newest year sets the baseline. It’s easier to fix the most recent year when your info and records are freshest.
- Each year can depend on the one before it. Things like losses, credits, and deductions sometimes carry over, and you don’t want to miss them.
- It matches how the IRS checks your numbers. Starting with the most recent year helps your return line up with what the IRS already has on file (W-2s, 1099s, etc.).
- It helps you avoid messy do-overs. If you file older years first, you might later discover info that forces you to amend multiple returns.
- You stop the “clock” sooner for recent years. Filing starts the IRS time limit for reviewing that year, and it also helps you see what you owe (or might be owed) sooner.
Why random or quiet filing can backfire
Filing late tax returns or FBARs “quietly” — meaning you just submit the missing forms without using the IRS’s official catch-up program — can be risky. If you qualify for the Streamlined program, filing the wrong way can cost you the extra protection it offers and may increase your chances of penalties.
The IRS says that even if you already tried an “FBAR quiet disclosure” — meaning you filed late tax returns and/or FBARs on your own without going through an official IRS disclosure program — you may still be allowed to use the Streamlined procedures later if you meet the rules (for example, your mistakes were non-willful and you qualify under the program).
But there’s an important catch: if the IRS has already assessed penalties and you’ve been charged for those late filings, using Streamlined later usually won’t erase penalties that are already on your account. Streamlined is mainly meant to reduce or avoid penalties when you enter it properly from the start, not to “undo” penalties after the fact.
That’s why it’s smart to check whether you qualify for Streamlined before you submit anything – because the first way you file can affect both your penalty risk and your options later.
Rules if you’re a US citizen or green card holder living abroad
Cook v. Tait (1924) confirmed that the US can tax its citizens even when they live overseas, and many expats are surprised to learn that the rule still applies today – worldwide income is the starting point.
Do you still have to report worldwide income while living abroad?
Yes – US citizens and resident aliens, including green card holders under the green card test, must report worldwide income even while living abroad. You generally have to report worldwide income to the IRS if you’re in either of these groups:
- US citizen (even if you live abroad full-time)
- US tax resident (“resident alien”), which can happen if you:
- a) have a green card at any time during the year, or
- b) meet the substantial presence test (you spent enough days in the US over a 3-year lookback formula)
So:
- Citizens: worldwide income reporting applies regardless of where you live.
- Green card holders: usually yes, worldwide income reporting applies, even if you live abroad, until your green card status is officially ended for tax purposes.
- No green card + not enough US days: you might be a nonresident alien for tax, and the rules are different (often mainly US-source income, with treaty exceptions).
This means income from any country must be listed on a US tax return. The basic filing rules are mostly the same as for someone living in the US.
Should you use the foreign earned income exclusion or the foreign tax credit?
Foreign Earned Income Exclusion (FEIE) = a way for US taxpayers living/working abroad to exclude (remove) some foreign salary/self-employment income from US federal income tax if they qualify (usually by meeting a “living abroad” test). You still file a US return, but you may not pay US income tax on that excluded chunk.
Foreign Tax Credit (FTC) = a way to credit (offset) income taxes you paid to another country against your US tax bill on the same income, so you’re not taxed twice. It doesn’t remove the income from your return; it reduces the US tax you owe.
The choise depends on your type of income, the tax rate in the country where you live, and which option lowers your US tax the most.
- FEIE (Form 2555): For the 2025 tax year, the Foreign Earned Income Exclusion lets qualifying taxpayers exclude up to $130,000 of foreign earned income per person. For the 2026 tax year, the limit increases to $132,900. The FEIE amount is indexed for inflation, so it can change each year.
- FTC (Form 1116): This reduces US tax based on foreign income taxes paid or owed, but it cannot apply to income already excluded under FEIE.
The FEIE often works best in countries with lower tax rates or when income is under the limit, while the foreign tax credit often works better in higher-tax countries – which can be a key part of what to do about never-filed taxes when you’re catching up from abroad.
Why can an expat owe $0 but still need to file?
Many expats owe $0 because the FEIE and foreign tax credit can reduce or remove US tax, but filing is required to claim those benefits.
One common reason someone who never submitted a tax return is believing that living abroad removes the US filing requirement, yet the IRS still applies income thresholds and other filing triggers, like:
- you had self-employment (freelance) income over the filing threshold,
- you’re filing under a certain filing status (single, married filing jointly/separately, head of household), which changes the income limit,
- you can be claimed as a dependent (your filing threshold is usually lower),
- you had certain types of income like investment income (interest, dividends, capital gains), or
- you owe special taxes (for example, self-employment tax or additional taxes in certain situations).
Filing also protects refund deadlines and helps prevent the IRS from creating a substitute for return that may leave out deductions – shifting the focus from fear to taking clear action.
What if you have foreign bank accounts? (FBAR and FATCA)
If you have foreign accounts, more than just income may need to be reported. The FBAR – formally called the Report of Foreign Bank and Financial Accounts (FinCEN Form 114) – is separate from your tax return and is sent through a different BSA E-Filing System (FinCEN).
It applies once certain accounts (bank accounts, or also investment accounts, pensions, crypto exchanges, joint accounts, employer accounts) value thresholds are met (aggregate value exceeded $10,000 at any time during the calendar year), even if you do not owe any US tax.
| Item | Tax Return | FBAR |
|---|---|---|
| Purpose | Report income | Report foreign accounts |
| Filed with | IRS | FinCEN |
| Tax owed? | Possibly | No |
| Penalties | Tax-based | Reporting-based |
Foreign Account Tax Compliance Act (FATCA) rules require some taxpayers to report specified foreign financial assets on Form 8938, and this is also based on set thresholds. Form 8938 is filed with the tax return, while FBAR is filed separately.
The FATCA penalties focus on the failure to report, not just unpaid tax. That’s why a US citizen abroad who never filed a tax return should review both income filing and foreign account reporting together. Handling both at the same time creates a safer path into the compliance options that follow.
Streamlined Procedures vs just filing now
Streamlined Procedure is an IRS program that lets people fix missed foreign income or accounts when the mistake was not intentional. It usually means filing the last 3 years of tax returns and 6 years of FBARs, and some US residents may owe a 5% offshore penalty.
A US citizen living abroad who never filed a tax return should not use it if the IRS has already started an audit or if the conduct was willful (you knew about the filing/reporting rules and chose not to follow them, or tried to hide accounts or income). Just filing now is not always safest, because sending late forms the wrong way can trigger penalties that the streamlined process may help reduce.
| Option | What it means in simple terms | Best for | Penalties & risk | Common mistake |
|---|---|---|---|---|
| Just filing now | You file missing tax returns as if nothing happened | People with very simple situations and no foreign accounts | Penalties may apply if tax is owed; the IRS may question older years | Filing without checking if a safer IRS program applies |
| Streamlined Procedures | An IRS program to catch up if you didn’t know you had to file | Expats and green card holders who were non-willful | Usually reduced or zero penalties if you qualify | Using it when you’re not eligible |
| Delinquent return programs | Filing late returns when no tax is owed | People who truly owe $0 for missing years | Low risk if conditions are met | Assuming this covers FBAR automatically (it doesn’t) |
| Reasonable cause filing | Explaining why you didn’t file and asking for penalty relief | Limited situations with strong documentation | Case-by-case; not guaranteed | Using it when Streamlined would be safer |
| Doing nothing | Waiting and hoping the IRS never notices | No one | Risk increases over time; penalties stack | Believing the IRS “forgets.” |
| Professional-guided compliance | A structured approach using the correct IRS option | Anyone unsure which path applies | Lowest risk when done correctly | Trying to self-diagnose a complex case |
What if you truly didn’t know you had to file?
Finding out years later that a return was required can feel overwhelming, but the IRS makes a clear distinction between someone who didn’t know and someone who deliberately chose not to file – and that difference shapes what happens next.
| Non-willful – honest mistake | Willful – intentional choice |
|---|---|
| The return wasn’t filed because of confusion, a misunderstanding, or a simple oversight. The IRS describes this as negligence, inadvertence, or a good-faith misunderstanding. | The person knew there was a filing duty and consciously chose to ignore it. |
| Often eligible for structured catch-up options like the streamlined filing compliance procedures when offshore issues are involved and the facts qualify. | May require entering the IRS Criminal Investigation Voluntary Disclosure Practice to reduce prosecution risk. |
| Penalties can be reduced under streamlined rules; for example, domestic (you’re a US tax resident or you don’t qualify as a foreign resident) streamlined generally applies a 5% miscellaneous offshore penalty. | Civil tax, penalties, and interest still apply, and criminal exposure is a factor the IRS evaluates. |
Examples of non-willful situations
- Living overseas and genuinely thinking paying foreign tax meant no US return was required.
- Moving frequently, losing records, or relying on incomplete information from an employer.
- Acting on incorrect professional advice and believing everything was handled correctly.
- Overlooking self-employment income or foreign account reporting without trying to hide anything.
NOTE! Importance of truthful explanation – and why intent changes outcomes
When someone says, “I have never filed an income tax return,” the most important next step is telling the full story clearly and honestly. The IRS streamlined process requires a written certification that the failure was non-willful. False statements can create serious consequences (e.g., losing eligibility, penalties, legal exposure), while honest explanations supported by documents can significantly reduce penalties.
Similarly, saying you have never submitted a tax return is not the end of the road. Filing stops the failure-to-file penalty (for that year once you file that year) from continuing to grow. Once the facts are laid out truthfully, fear starts to turn into a plan: gather records, choose the correct filing path, and move forward in compliance.
Common myths about never filing taxes
These myths keep people stuck. The truth helps you move towards compliance faster.
If I didn’t owe any tax, I didn’t need to file
It feels logical – no tax bill, no problem.
But the IRS sets income rules for who must file, and some types of income, like self-employment, can require a return even when little or no tax is owed.
The IRS would have contacted me if there was a problem
No news can feel like good news. In reality, the IRS can use income records from employers and banks and act later, so waiting for a letter is not a plan.
Living abroad means I’m exempt from US taxes
Many people think leaving the country ends their US tax story. US citizens and green card holders usually still have to file and report worldwide income, even when they live and pay taxes overseas.
I can just file now and fix everything quietly
It sounds easy to send in one return and hope the past stays buried.
The IRS may already have income data on file, and special programs like streamlined procedures have clear steps that must be followed the right way.
If I never filed, it’s already too late to fix
After years go by, it can feel too big to solve. It is not too late, but ignoring it allows penalties and interest to grow and keeps the issue open, while filing starts putting limits in place and moves things toward resolution.
When should you talk to a tax professional?
It’s usually a good idea to get help if:
| Situation | Can you do it yourself? | Why or why not |
|---|---|---|
| Missed only one recent tax return | Usually yes | The process is similar to normal filing if your situation is simple |
| Never filed taxes before | Sometimes | It depends on how many years are missing and whether the income was straightforward |
| Multiple years never filed | Usually no | It’s easy to miss required years or choose the wrong filing approach |
| Lived abroad while not filing | Often no | Special expat rules and exclusions can change what you should file |
| Have foreign bank accounts | No | FBAR and other reports are separate and easy to get wrong |
| Owe little or no tax | Maybe | Even with no tax owed, reporting mistakes can still cause problems |
| Received IRS letters or notices | No | Responding incorrectly can make the situation worse |
| Unsure which IRS option applies | No | Choosing the wrong path can increase penalties or risk |
Getting guidance in these moments is not about fear – it is about moving from stress, with a simple plan you can follow. At Taxes for Expats, we help you move to confident compliance through expert-led Streamlined Procedures designed for real expat lives, so you can leave non-compliance behind and move forward with peace of mind.
FAQs on what to do if you never filed taxes
Start by checking which years needed a return, then file the missing returns using the right forms for each year. IRS transcripts can help rebuild income records when paperwork is missing.
Most cases lead to money penalties, not criminal action, and filing returns is the main way to start fixing it. Criminal cases focus on willful non-filing, which is a different fact pattern.
File a return for any prior year using that year’s forms and instructions, the same way an on-time return is filed. When you need help, IRS Free File or IRS-supported free prep programs may be available.
Filing may still make sense to claim a refund from withholding or credits, but refund time limits apply. Filing also creates a clear record that a return was filed for that year.
Living abroad does not remove the need to file when a filing requirement exists, and the IRS has specific guidance for taxpayers abroad. For non-willful cases with offshore issues, streamlined procedures can be the right path for catching up.
FBAR is a separate report filed with FinCEN, and it can be required even when no tax return was filed. When late FBARs apply, the IRS explains how to submit them under delinquent FBAR procedures.
DIY filing is allowed, and the IRS lists free and paid help options, including how to choose a tax professional. Help is also available through IRS-supported free prep programs for eligible taxpayers.
