Haven’t Filed Taxes for Years? 4 Things You Need to Know

Businessman at Work — Overland Park, KS — Wiesner & Frackowiak LC

Have you failed to file income tax returns for a few years? For many taxpayers, a single missed year can accidentally turn into several missed years. There may or may not be immediate consequences, but many find it hard to get back on track. If you’re in this position, here are four things you should know about filing old taxes.

1. You Can Still File

Whether you missed one year of taxes or many, you can generally still file your returns. It may be more complex as time passes, but you can fix the problem and get right with the IRS or state tax agencies. Generally, the statute of limitations for the IRS to seek old tax returns is ten years, although the agency often stops at six years. Certain activity, such as fraud, can lengthen this time period.

The good news is that many tax professionals can help you file for up to ten years, as they keep updated software to complete returns under old tax rules.

2. Three Years Is a Key Number

If you missed any tax deadlines, start with the most recent three years. Why? These are the tax returns on which you can still qualify to receive your tax refund. Whether or not you must file older forms, you won’t receive any refunds for overpayments or tax credits. Depending on the situation, you may find that it’s best to focus on completing returns that result in a refund first before moving on to older ones.

3. The IRS May File for You

A taxpayer may find that the IRS has done the calculations for them and will send the taxpayer a notice of the end result. This is known as a Substitute for Return Form (SRF), and it isn’t necessarily going to be filed in your favor. The IRS will use the returns that have been filed by your employer or other payers and prepare the return — however, they may be missing a lot of information that could result in a refund.

If the IRS sends you notices about this process, you should talk with a professional tax preparer about the outcome. You can still file a return if the SRF did not credit you with dependents, expenses, tax credits, or deductions that are due.

4. Filing Can Help You 

There are many reasons that taxpayers neglect to file their taxes, but it often happens if filing will result in a tax bill that you cannot afford to pay. However, even if this is the case, you can still benefit from filing. How?

First, filing is necessary if you need to claim bankruptcy. Without a filed tax return, your tax debts cannot be deemed eligible for discharge. And those which are filed must be filed within a certain time frame to qualify when you claim bankruptcy.

Second, sometimes a taxpayer is wrong that they won’t get a refund (or will only get a small one). No matter how the situation may look, an experienced tax preparer can often help you secure a legitimate refund where you didn’t think it was possible.

Finally, the IRS may be willing to work with you regarding taxes due — but not if you’re a delinquent filer. Having your old returns completed puts you in a better position to negotiate, make offers in compromise, halt levies or garnishments, and appeal findings.

Where to Start

While the fact that you have old but unfiled tax returns isn’t something to celebrate, it is something you can fix and something that may have silver linings. Find out more about getting those returns completed by meeting with the tax attorneys at Wiesner & Frackowiak, LC. We will help you get your old tax issues resolved and find a way to move forward today.

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