At the end of fiscal 2025, the IRS had identified 73.2 million potential nonfiler cases covering tax years 2019 through 2023, according to a Treasury Inspector General for Tax Administration report dated Aug. 26, 2026. The agency sent 3.2 million nonfiler notices that year, up from about 1.7 million in fiscal 2024. The report, signed by Deputy Inspector General for Audit Diana M. Tengesdal, made no recommendations.
The figure counts cases, not people, and it covers individual returns. Twenty-four million of the cases, or 32 percent, come from tax year 2023. The report calls them potential cases and does not say how many have been confirmed as an actual filing failure.
For anyone who skipped a return in one of those five years, the practical question is whether a letter is already on its way and what happens if it goes unanswered. The 3.2 million notices sent in fiscal 2025 amount to a small fraction of the 73.2 million cases the agency has identified.
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Why did the number of nonfiler notices nearly double?
The IRS sent 3,157,055 nonfiler notices in fiscal 2025, mostly for tax year 2023 returns, compared with 1,679,141 in fiscal 2024, which were mostly for tax years 2020 through 2022. The jump follows a long pause. According to the report, the agency paused nonfiler notices intermittently from fiscal 2020 through fiscal 2022 and for all of fiscal 2023.
Notices restarted in February 2024, when the IRS resumed its return delinquency process, and the agency announced a new effort aimed at high-income nonfilers. The Inspector General’s office says IRS officials reviewed the report before it was issued and agreed with its facts and conclusions.
What happens if the letters go unanswered?
The IRS can prepare a return on a taxpayer’s behalf, called a substitute for return. The agency’s page on past-due return notices lists the letters that lead there, from CP59, which says the IRS has no record of a prior return, to CP518, described as a final reminder. It also says that if the IRS files a substitute return, “it is still in your best interest to file your own return.”
The Taxpayer Advocate Service warns that a substitute return “may overstate your tax liability,” because it leaves out exemptions, credits and deductions the person could have claimed. The TIGTA report shows how much more of this is happening. Substitute-return program cases closed with taxpayer contact rose from about 1,200 in fiscal 2024 to about 161,900 in fiscal 2025, and additional assessments climbed from $82 million to $2.9 billion.
Is anyone actually knocking on doors?
Mostly, no. The report says the IRS did not conduct revenue officer compliance sweeps in fiscal 2025, which it attributes to limited resources. Revenue officers fell from 3,418 to 2,544 over the period the report covers, and examination and collection staff dropped about 27 percent between fiscal 2024 and fiscal 2025. Individual return examinations fell 30 percent.
What grew instead was automation. Collection revenue rose 17 percent from fiscal 2023 to fiscal 2025, driven mainly by automated collection notices, the report says. For a nonfiler, that means the likeliest contact is a computer-generated letter, not a visit.
What does a missing return cost in the long run?
The IRS’s own tax gap estimate puts a number on it. Nonfiling accounts for $63 billion of the $696 billion gross tax gap the agency estimates for tax year 2022, according to the TIGTA report.
For an individual who is owed money, the cost is different. A refund does not arrive until a return is filed, and the Taxpayer Advocate Service says a refund claim generally has to come within three years of the date the original return was filed, with a two-year-from-payment rule as the alternative. The agency calls the cutoff the Refund Statute Expiration Date, and a refund claimed after it can be lost entirely.
Is there an unfiled year with a refund behind it?
A nonfiler notice is not only a warning about what is owed. For people who had tax withheld in a year they never filed, the refund time limit keeps running while the IRS works through a backlog of 73.2 million cases.
The IRS Refund Recovery Kit is a 20-page guide that sets out the 3-year refund deadline for people who never filed, so a reader can see which unfiled years still have a refund within reach. The kit runs seven parts across those 20 pages, and the refund deadline is the piece written for readers who never filed.
Get the 3-year refund deadline guide for unfiled tax years →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
