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You should always file your tax return to invoke the 3 & 10 year statute of limitations and avoid penalties and interest charges that can bankrupt you. The IRS may file a return (SFR) on your behalf or just do nothing for a few years. You will eventually get a tax bill that most likely will be twice the original debt. Additionally, the IRS places you in a category of tax protesters that are treated with contempt as a matter of policy. It's also a criminal offense not to file! and a criminal offense to file a false tax return.
There was a time in our history, prior to the sixteenth amendment, where income taxes
were prohibited by the Constitution. However, in 1913, passage of the sixteenth amendment,
eliminated the requirement of apportionment of taxes on incomes, and Congress gained the
power to tax income from individuals from “whatever source derived.”
Non filers and tax protesters are individuals that do not file tax returns for many reasons,
but mostly because they either do not have the money to pay the tax that will be due if they
file the returns, or they believe the act of taxation on citizens is illegal. The tax protester
movement is mostly based on frivolous arguments that are not upheld in the Federal Courts
Consequently, the Federal Courts are quick to punish taxpayers that waste time raising the
same frivolous arguments. The penalties for such acts can be very severe:IRC Sec 6702 penalty of $5,000 for filing a tax return based on a frivolous or substantially incorrect position; IRC Sec 6673(a) penalty of $25,000 for filing a petition with the tax court based on a frivolous legal position; and finally IRC Sec 6673(b) for filing frivolous claims in other Federal Courts. A sad consequence of this movement is that many people are
duped into paying thousands of dollars to learn how to beat the IRS in these seminars and
ultimately end up getting caught and paying a heavy price. For more information, read these
interesting cases: Irwin A Schiff v US and Schultz v US.