question about filing taxes

you must file a tax return.

but i doubt the govt is going to come after you for giving them interest free loans

If your gross income was under $9500 for a single person and you do not owe the gov any money, you do not have to file a return if you do not want to.

do you have to get a lawyer to figure this out? is this sort of thing out of HR Blocks league?

IRS does not pay refunds on returns filed three years past the due date.

You lose.

I have had a lot of experience in this (mostly painful).

Many people do not realize that not paying taxes isnt a crime, the crime comes from not FILING taxes. The US GOV will not do anything to you if you are owed a refund, they will simply note the status and allow it to remain open, however penalties resulting from not filing will begin to accrue, which eats away at the refund amount. Also,you actually have 5 fiscal years to file that claim for the refund, minus the fees that have compounded over the time passed. You will not get this done through anyone like H&R Block/Jackson Hewitt, etc, you will have to go through a CPA. The best practice is to file every year, regardless of how much you make. From someone who has had many battles with the IRS stemming from being self-employed, trust me, you want to maintain a clean history of tax filings.

Also, use a CPA, do not trust H&R Block/JH/Mom&pop Tax service, etc, etc. The majority of these organizations hire seasonal(part-time) employees who are basically just given a crash course and turned loose to file your returns. They usually charge between $140-$300 to file your taxes. A CPA is thorough, knows every tax law and is 100X more competent. And they usually charge $200-$250. Pretty much the same cost but eliminate the risk of incorrect filings..

pretty sure its 3 years to file if you want IRS to pay a refund. So they will pay a refund for 2009, but not for 2008.

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Also, use a CPA, do not trust H&R Block/JH/Mom&pop Tax service, etc, etc. The majority of these organizations hire seasonal(part-time) employees who are basically just given a crash course and turned loose to file your returns. They usually charge between $140-$300 to file your taxes. A CPA is thorough, knows every tax law and is 100X more competent. And they usually charge $200-$250. Pretty much the same cost but eliminate the risk of incorrect filings..

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I beg to differ on a few points here. It is true that Block, Jackson-Hewitt, Liberty, etc. do employ seasonal tax preparers who are trained to complete very simple returns. But it is also true that Block employs a large number of seasonal and year round tax preparers who are Enrolled Agents. I cannot speak for the other tax preparation companies. I would also ask that if your CPA makes a mistake that triggers penalties or interest, will your CPA pay those penalties/interest? Block will pay those penalties/interest if the mistake is theirs. Enrolled Agent certification is not an easy accomplishment. And you don't attain this certification via a crash course. The IRS now has a tax certification requirement for all paid tax preparers. If you can't pass the IRS test, you ain't gonna be a paid tax preparer for anyone. And this is a good thing. The new tax preparer certification test is, in my opinion, designed to run the Mom and Pop tax office out of business. And this certification/test out procedure will certainly put some incompetent tax preparers out of business. That's a good thing,too. The IRS has lowered their tax law CE yearly hours to 15 hours/year now. That's not much, imho. And I agree that a tax preparer who has only taken the "basic" income tax course should not attempt to file a return such as you have described. FWIW, I have filed 1040X (amendments) for returns originally prepared by CPA's. Everyone is human and everyone makes mistakes. And I am not a CPA. I suspect that some returns are prepared by an assistant or "secretary" and signed off on by the CPA. That had to be the case on the amended returns I filed for clients because I just cannot imagine a CPA making the mistakes that I found. As a taxpayer, you and I can only go back three years to file a return. The IRS can go back much further than that if they find an error on your previous returns or current return. There are income filing thresholds that apply to each filing status and these thresholds change each year, not much, but they do change. If you do not meet these filing requirements, then you are not required to file, BUT you might be, and probably are, leaving money on the table for the IRS to grab and keep if you do not file a return. Just as with any other business, there are good offices and there are bad offices. There are incompetent tax preparers and there are competent tax preparers. And there are incompetent CPA's and there are competent CPA's. The challenge lies in discovering the difference.

For an H&R Block franchise to be profitable the franchisee must keep his labor costs to about $15 per hour of productive time per employee. Please tell me where you get qualified tax return preparers for $15 per hour?

As for penalties and interest incurred due to errors made by a CPA you should learn a little about the tax laws that allow waivers of penalties when the taxpayer reasonably relied on the advice of a professional. Thus, any CPA worth a damn will be able to get the penalties waived, and then the CPA will likely pay the interest. Any additional tax is rightly the obligation of the taxpayer.

i know this is crazy but one of my sister's friends got out of school had never worked got a job making 40k plus and for 4 years never filed a tax return claims she didn't know how to do it.