Unfiled Tax Returns: What Should You Do?

Taxpayers that fail to file their tax return for one or more years can become overwhelmed later on when attempting to file all of their missing tax years all at once. Missing all or a portion of their records, personal hardship and/or neglect are some of many reasons people fall behind in filing their taxes. Having unfiled tax returns with a balance due will lead to a taxpayer facing harsh tax penalties issued by the IRS and State. Fortunately, there are ways to approach the problem of unfiled tax returns.

What happens if you have Unfiled Tax Returns?

Over the past few years the IRS and States have really stepped up their technology to catch people who failed to file their tax returns. It is no longer a question of if taxation authorities will find out; it is when they will find out. If taxes are owed, tax penalties and interest will continue to accrue from the date that they were due. Most years, the IRS requires that a taxpayer file their taxes by April 15th. If you have unfiled tax returns, it is in your best interest to resolve the issue as soon as possible. Even if the IRS or State has not notified you of an unfiled return, you should file as soon as possible to avoid potential penalties and interest. Even if you are owed a refund, file as soon as possible because you could be earning interest on that money, paying down debts or putting it to use in some other way.

Late penalties

The IRS will assess a penalty equaling 5% of any unpaid taxes for every month that a tax return goes unpaid. This will max out at 25%. Speak to a professional consultant if you need to file for an extension on your taxes to avoid these penalties.

Delayed Refunds

If you consistently file late, the government may run an investigation, which can take some time. This will consequently delay your tax refund and may result in a refund being forfeited depending on the fines.

How many years does the IRS go back for Unfiled Tax Returns?

The IRS rarely goes past six years for non-filing enforcement. For the most part, delinquent returns and SFR enforcement actions are completed within three years after the due date of the return.

How do I resolve Unfiled Tax Returns?

The following steps are key to resolving unfiled tax return problems.

Gather all the information needed to file the past-due return. You can do this by contacting the IRS and requesting your wage and income scripts.
Complete your return accurately and submit it to the appropriate IRS unit.
Keep an eye on the return processing and other compliance activities. You can do this by contacting the appropriate IRS unit to make sure the IRS processed your return.

Do You Have Unfiled Tax Returns? CuraDebt Tax Can Help

No matter how many years of unfiled tax returns you have, we can get them all filed for you through our qualified tax preparation team. The first step to getting back into compliance with your taxes is to quickly get your tax returns filed while maximizing credits and deductions that you qualify for.

If you have not filed your taxes in years, there is a good chance the IRS and State will file a tax return on your behalf in order to assess taxes owed and begin the collection process. The Substitute for Return (SFR) will give only basic deductions and will likely leave out many deductions and credits that you are actually entitled to. Our tax professionals will file an original return based on income information obtained from the IRS, and ensure you receive all of the proper credits and deductions that you are entitled to, likely reducing your overall tax liability. Returns should be filed as soon as possible in order to avoid accumulating interest and penalties. If returns have not been filed for the three most recent tax years, those returns should be prepared immediately in order to claim any refunds that may be due. For assistance with a tax return, speak with a tax professional at CuraDebt Tax.

If you have unfiled returns and you can’t pay the taxes that are due after you file, we can file your tax returns and then work out a resolution plan for the taxes you owe. Everyone’s tax situation is different, our tax team can analyze your situation and negotiate a resolution plan that works for you, based on your financial circumstances.