How long can a person goes without filing an income tax return? I'm hearing people say IRS allows you up to 2 years and without imposing a penalty.

[bluedeb]

You should be filing your tax returns when they are due, the IRS does not "allow" anyone up to two years without imposing a penalty.  If you are due a refund there is no penalty for filing a late Federal return, but you have to file your return within 3 years of the original filing date of the return to claim a refund.  Your state may impose a penalty for filing a late return even if you are due a refund, you would have to check with your State's website.

If you owed taxes they were due by April 17, 2012 to avoid any interest or penalty, interest & penatly will incurr until the taxes owed are paid in full, the IRS (& State if any) would send you a bill for any interest or penalty owed once the taxes have been paid in full.  See the following for information on IRS Failure to File or Pay Penalties
http://www.irs.gov/uac/Failure-to-File-or-Pay-Penalties:-Eight-Facts

and
http://www.irs.gov/taxtopics/tc653.html

If you owe State taxes you would have to check your State's website for penalty and interest information (they would also send you a bill if you owed any penalty or interest). The following is a list of State's, click on your's to go to their website:
http://turbotax.intuit.com/support/iq/State-Taxes/State-Taxing-Agency-Contact-Information/GEN12028.h...

[VolvoGirl]

It probably takes the IRS 2 years to catch up and send letters to people who didn't file.