Originally Posted by Russ Smith
A friend didn't work all of 09 and wasn't eligible for unemployment so she had zero income, no interest income nothing. I went ahead and started a return on Turbo tax for her and it went through the whole thing including the personal exemption (3650) and standard deduction (5700) and came up with a return of $0 Federal and $0 State. I haven't completed it I still have to do the "wrapup" tab and the print and file tab but it appears that even with those exemptions because she paid no taxes on no income there is no return. She had hoped there was some carry forward loss or stock stuff but there isn't.
Does she HAVE to file? Is there any advantage to filing or not filing? I'm only asking because if I go much further she'll then have to pay for filing, which while not very much is still money out of pocket and when she's not working if she doesn't HAVE to pay it she won't want to.
If she has no income, then she doesn't have to file.
But the danger is that this probably won't pass the IRS's sniff test (how does she pay her bills?). She should probably be prepared to answer some questions such as "is she living off of savings, or supported by parents, etc.?" if she's filed before and then doesn't file, and then the IRS flags her for an audit.
However, if she has credit cards, or a mortgage, then she needs to aware that the IRS can get documents from other sources that indicate that she has money, and that can trigger some flags also.