How to Resolve Unfiled Tax Returns: A Guide to Getting Caught Up

Have you fallen behind on filing your tax returns? You’re not alone – millions of Americans have unfiled tax returns. The reasons are many – life changes, fear of owing money, forgetting. Regardless of why you have unfiled returns, it’s important to take action to get caught up. Failing to file tax returns can lead to penalties, interest charges, and other problems with the IRS.

In this comprehensive guide, we’ll explain everything you need to know about resolving unfiled tax returns:

What is an Unfiled Tax Return?

An unfiled tax return is a return that was not filed with the IRS by the annual due date. The IRS requires all Americans to file a tax return reporting their income, deductions, credits, etc. If you fail to file, you have an unfiled tax return for that year.

Why You Need to File Unfiled Returns

There are several key reasons it’s imperative to file unfiled returns:

Avoid penalties and interest: The IRS will hit you with a “failure to file” penalty of 5% per month of your unpaid balance. Interest also accrues on unpaid taxes. Filing returns and paying taxes owed stops these penalties and interest from snowballing.

Claim refunds: You may have a refund waiting from a prior tax year. You must file a return to claim your refund. The statute of limitations is 3 years.

– Prevent problems: Unfiled returns can affect your credit, lead to wage garnishment and tax liens, prevent loan approval, and cause other issues. Take control by filing.

Prove compliance: Filing returns and getting in good standing shows the IRS you intend to comply moving forward. This can help avoid future audits and issues.

Simply put, it’s in your best interest to file your unfiled returns as soon as possible.

How Many Years of Unfiled Returns Can the IRS Go Back?

The IRS statute of limitations on collections is 10 years. However, there is no statute of limitations for unfiled returns. The IRS can file returns on your behalf at any time. It’s best not to let things go that long. Take a proactive approach and get your unfiled taxes resolved quickly.

I Haven’t Filed Taxes in Years – What Do I Do?

If you have several years of unfiled returns, the process of getting compliant may seem daunting. However, an experienced tax professional can guide you through it. Here are some steps to take:

Gather documentation: Locate old W2s, 1099s, records of income and deductions, and anything else relevant to your taxes.

Estimate if needed: If documentation is unavailable, you may need to estimate income and deductions. A tax pro can help reconstruct records.

File returns in order: File your oldest return first, then the next year, and so on. Ensure each year is processed before moving on.

Pay / set up installment plan: If you have a balance due, pay it off or set up a payment plan with the IRS. An installment agreement spreads out what you owe over time.

Stay compliant: Continue filing and paying on time once you’re caught up.

Getting compliant may seem intimidating, but an experienced tax attorney or CPA can make this a smooth process. They know the proper procedures and will handle everything from preparing the returns to negotiating with the IRS on payment options. Don’t delay – get professional help to resolve your unfiled taxes now.

What if I Can’t Pay My Back Taxes?

Many taxpayers owe substantial balances due when filing unfiled returns. If you can’t afford to pay what you owe right now, don’t panic. The IRS has options, including:

Installment agreements: Pay off your balance over 6-72 months with automatic monthly payments from your bank account. Low income taxpayers may qualify for a plan as long as 10 years.

Offer in Compromise: Settle your tax debt for less than the full amount owed in certain circumstances. This program is for those unable to fully pay their tax bill.

Currently Not Collectible Status: The IRS temporarily delays collection if forcing payments would create a financial hardship. Interest and penalties continue accruing.

Penalty abatement requests: In some cases, the IRS will abate penalties for “reasonable cause.” A tax pro can request abatement on your behalf.

Explore all your options and choose the best tax debt solution for your financial situation. Don’t try to navigate this alone – an experienced tax professional advocate on your side makes all the difference.

Do I Need to File State Tax Returns Too?

In most cases, yes – you need to file state returns as well for any years you have unfiled federal returns. The IRS shares information with state tax agencies, so once you file your federal return the state will expect you to file as well.

Each state has its own filing requirements, deadlines, and processes. An accountant familiar with both federal and state tax laws can ensure you cover all the bases. They’ll prepare accurate federal and state returns, then guide you through any additional documentation or procedures required at the state level.

Trying to handle state tax filing on your own can get confusing fast. Getting expert assistance ensures you complete the process properly for both federal and state.

How Can a Tax Professional Help With Unfiled Returns?

A tax resolution specialist can make getting caught up on unfiled returns practically turn-key. Here are some of the ways they can help:

– Obtain previous tax records and documentation
– Reconstruct records if documentation is missing
– Prepare accurate returns for all unfiled years
– Determine if you have a refund coming for any years
– Calculate any taxes, penalties, and interest owed
– Negotiate with the IRS for payment plans or reductions
– File state returns and handle any state-level issues
– Avoid future problems through proper compliance

Plus, an experienced tax pro has specific knowledge of IRS processes, rules and regulations. This can help resolve unfiled returns as quickly and seamlessly as possible. Don’t leave anything to chance – get professional assistance to ensure you complete this properly.

Take Control of Your Tax Situation

If unfiled returns have been weighing you down, now is the time to take action. Ignore the problem no longer – get the expert help you need to resolve your unfiled taxes. An experienced tax attorney or CPA will guide you through the entire process from start to finish.

Get started today – your future self will thank you for taking control of this situation once and for all! The first step is reaching out to discuss your specific circumstances. Help is available, and filing those unfiled returns is very achievable. Don’t wait – you’ve got this!

In Conclusion:

– File unfiled returns ASAP to avoid penalties and interest, claim refunds, etc.
– The IRS can go back indefinitely on unfiled returns – so file now.
– Work with a tax pro to gather docs, estimate income if needed, prepare returns, and handle the IRS.
– If you owe, discuss options like payment plans and Offers in Compromise.
– Handle state returns as well.
– Let an expert handle everything for smooth sailing! Help is out there – contact a tax pro now.