This form exists grammatically in English, but for the life of me, I cannot think of a context in which this would be used. It always comes out as "Are you failing again?"
Well, the question is altogether odd. The only context I can imagine it in is asking a child about her grades in school. In that case, it would clearly be "are you failing again?" For instance, "I know you have not done well in mathematics in the past, and now Mr Euclid tells me you are having difficulty in geometry class. Are you failing again?" I still honestly cannot think of a story that would produce either "do you fail again?" or "you fail again?"
This has to do with the strangeness of modern English, actually. For most present actions, we use the progressive form (aspect?), "You are x-ing." The simple present tense we now tend to use for habitual or general actions, so I could see the question "You fail?" asked of someone who has failed the same test over and over. The addition of "again," though means we are talking about this one latest instance, so we would always say "Are you failing again?" I have had occasion, unfortunately, to say this as a parent. As a teacher, I could say the statement "You fail again," but that would be because I was informing the student of the general situation, and I would not need to ask whether it was the case.
Oh, in past tense this would be common enough. "How was the test? Did you fail again!?"
Present temse requires gymnastics, I think. Perhaps in a hypothetical situation... "Imagine taking your road test in a stress-free environment. Do you fail again?" Even there, would might sound better than do.
Speaking of English, the tips and notes for this section has a handful of English errors.
Beautifully phrased sentence Sir...there's been a number of times i've needed this phrase but been unable to phrase it the way I wanted...always coming off like a passive aggressive know it all....but this Sir, this is poetic use of English....beautiful... I shall use it every day, once per lesson!