I didn't file my taxes in 2006 because I wasn't sure I had made enough.Now filing this year should I file last years as well?I don't want them to penalize me.

If you did not earn enough to have to file, there is no need to file.

If you earned enough last year that you should have filed, you will need to file.

Even though you were not sure you made enough money in 2006, you still have to file a return for this year. IRS requires 1040 to be filed even if you make one dollar income..!
Do not combine your 2006 and 2007 tax returns, one because it's not permitted to do so, secondly, even if you are permitted you may end up paying taxes on higher braket in case of combination... YET IT IS NOT RIGHT WAY TO FILE 2006 & 2007 COMBINED...

How to file:
File your 2006 return on 2006 1040 form, mail it separately while you are filing your 2007 weather 2007 one will be filed electronicaly or by mail.

The penality:
It depends on how your 2006 looks like, if it shows you are entitled to a refund, then you are not subject to any penality. If your 2006 return shows that you owe taxes, then you will have to pay the taxes plus the applied interest.

Karahmia:

Your assertion that the IRS expects you to file even if you make only $1 is NOT correct.

The IRS does NOT require anyone who makes below $8,750 for 2007 to file; that is the combined totla of one's personal exemption ($3,400) and standard deduction ($5,350). The STATE filing requirements varies from state to state.

Now, even if not required, most people SHOULD file if they had money withheld, because they need to recover the taxes withheld (at both the federal and state level). Further, people over the age of 24 can also qualify for the Earned Income Credit, especially if they have a child.

Aruo612:

For 2006, the return has to be mailed. If taxes are owed, interest will be due and is required by law; it CANNOT be waived. However, the late-filing/late-payment penalty can be waived by the IRS. Be sure to ASK that the penalty be waived on a cover letter with your tax return if you owe money and must write a check. The IRS will definitely bill you for the interest and penalties if you do not ask for the waiver. File the 2006 return first, because the IRS will hold up your 2007 refund until the 2006 return is filed.