[Patriotic1]

Untrue. My sister (a SAHM) had no income last year due to a divorce. Nothing to report = nothing to file = no child tax credit. Since I had paid mortgage & necessities, I was able to claim her and the kids with me as head of household.

[Drew68]

Untrue. My sister (a SAHM) had no income last year due to a divorce. Nothing to report = nothing to file = no child tax credit.

Your sister was misinformed:

Can I File an Income Tax Return if I Don't Have Any Income?

"The IRS lists the "additional child tax credit" and the "first-time homebuyer credit" as examples; if you qualify for these credits, you can receive a refund even if you had no income and paid no taxes. To claim the credits, you have to file your 1040 and other tax forms."

[Noamie]

Even if your sister had no income she still has to file.

In fact, the only possible way to go to jail via IRS is by not filing a return.

Have her contact an accountant asap.