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I'm asking on behalf of a friend, who, last year, worked 5 weeks through a temporary placement agency earning ~$400/week after taxes (~$550/week before taxes), and also worked 6 months at an internship earning $2,000/month in untaxed stipends. So, she earned about $15,000 in 2012, pre-tax.

She filed for 0 withholdings in her W4, so my (unprofessional) guess was that she'd be owed money, and therefore the IRS wouldn't care much if she didn't file her taxes.†

We'd appreciate some professional input. Is she at as much risk as any other individual of being audited and penalized to the same degree if she skips filing her taxes? In other words, is it so imperative that she should consider filing for an extension? Or does the IRS tend to overlook such individuals.

Thanks in advance.

Since the question itself is rather specific, I've made the question text more generic to help others.

† She'd file her taxes today if she could, but the worry is that time's running out, her W2s were sent to an old address (from which she hasn't been able to retrieve any mail), and it's been a frustrating process to get either employer's attention to retrieve new copies of her W2s.

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  • The last pay stub for each employer will give a very good approximation of the tax situation. Especially if it has a line about taxable wages.
    – mhoran_psprep
    Apr 2, 2013 at 20:06

2 Answers 2

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Publication 17 is a start. From that pub -

enter image description here

I don't know what the stipend was for or whether is was tax free. So I can't say for sure, myself.

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  • Thank you for this table; I didn't even imagine there was such an explicit standard. Her stipend was for an internship with a regional planning (urban planning) organization, if that helps.
    – Andrew Cheong
    Apr 2, 2013 at 19:10
  • No problem. The "Publication 17" above links to the document itself, for downloading. I hope someone more knowledgeable than I regarding 'stipends' will chime in and offer a definitive answer.
    – JTP - Apologise to Monica ♦
    Apr 2, 2013 at 19:41
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She filed for 0 withholdings in her W4, so my (unprofessional) guess was that she'd be owed money, and therefore the IRS wouldn't care much if she didn't file her taxes.†

Maybe, but doesn't she want that money back?

Is she at as much risk as any other individual of being audited and penalized to the same degree if she skips filing her taxes?

Audited and penalized are not the same. She's at the same risk of being audited, and even slightly higher since the IRS got reports of her wages, but didn't get the matching report from her. They may want to ask why. But it doesn't mean she's going to be penalized for anything. Being audited doesn't mean you did something wrong.

Or does the IRS tend to overlook such individuals.

The IRS might want to overlook because they're the ones owning money. She cannot get a refund without filing a tax return.

She'd file her taxes today if she could, but the worry is that time's running out

Filing an extension is free and it postpones the deadline to file till OCTOBER!

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