We report a comprehensive study of the paradigmatic quasi-1D compound (TaSe4)(2)I performed by means of angle-resolved photoemission spectroscopy (ARPES) and first-principles electronic structure calculations. We find it to be a zero-gap semiconductor in the nondistorted structure, with non-negligible interchain coupling. Theory and experiment support a Peierls-like scenario for the charge-density wave formation below T-CDW = 263 K, where the incommensurability is a direct consequence of the finite interchain coupling. The formation of small polarons, strongly suggested by the ARPES data, explains the puzzling semiconductor-to-semiconductor transition observed in transport at T-CDW.