How can I help my nonfunctional parents, who haven't paid taxes in 8 to 10 years due to the opioid epidemic, figure out their tax status, ensure they're legally compliant, and, if necessary, inquire with the IRS on their behalf with power of attorney?

The easiest thing would be to find a CPA or Enrolled Agent to do this for you - they can get the information much quicker than you can as a relative. For this they would get your parents to sign 8821s, send that to IRS, then they would get information on what years (if any) need to be filed for them to get into compliance. If any years need to be filed, they can do that based on transcripts, or provide the transcripts to your parents and you could file the returns using something like FreetaxUSA.

The other option would be for them to create online IRS accounts; you could check their Wage and Income transcripts for the last six years to see if any taxable income was reported under their SSNs. If you see any 1099-R or K-1 reports that usually means they should file a tax return.

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You can't set up an IRS account for another person - they have to upload a video selfie in addition to photos of their government-issued photo ID.

Life insurance is not taxable, although some people call things life insurance when it's not really life insurance. If they've inherited any retirement accounts and cashed those out, they probably have a filing requirement for any years with that income.

If they don't have any filing requirement they still can file for 2020 & 2021 to claim their stimulus money if they didn't get the payments. I assume they probably are on SSI and received all three stimulus payments, but I could be wrong. As long as they were not dependents of any taxpayer in 2020 / 2021 they would qualify for some Recovery Rebate Credits.

If they do and want to file for 2020, that tax return must be received by May 15, 2024 in order to claim any refund. For 2021 the cut-off is April 15, 2025.