How to File Past Unfiled Tax Returns

If you’re behind on your tax filings, the Internal Revenue Service (IRS) may soon be coming to collect, if they aren’t already. Getting back on top of your filings may seem intimidating, but a licensed tax professional can get you back on track, and help you avoid further penalties or collection actions.

If you’re hesitating to file because you know that you owe a large amount of income tax, a tax relief firm can help. A firm can evaluate all the factors at play in your situation and recommend solutions accordingly.

What Happens if You Have Unfiled Tax Returns?

The IRS can do any of the following as part of resolving an unfiled tax return:

Estimate the amount due
File your taxes for you (using a Substitute for Return)
Assess a tax liability that’s greater than you actually owe
Take your tax refunds

Assess interest and penalties on unpaid taxes

It’s also important to note that if the IRS files your return, it will not include any deductions or credits, even if you qualify for them.

How Many Years Does the IRS Go Back for Unfiled Tax Returns?

For filed returns and assessed taxes, the IRS can pursue unpaid portions for up to 10 years after the fact. In these cases, you have a few options:

File for Bankruptcy
Apply for an Offer in Compromise
Apply for a Collection Due Process hearing

These actions can temporarily pause collection actions and add time to the 10 year total.

However, in the case of unfiled federal returns or unassessed taxes, there is no statute of limitations on collections. Until the IRS makes an assessment, the 10-year clock doesn’t start. Serious non-filing cases come with equally serious penalties, including up to $250,000 in fines and five years in prison.

That said, the federal government can only charge you with criminal tax evasion within six years of the unfiled return’s due date. The IRS is typically more concerned with inaccurate returns than missing returns.

How to File Unfiled Tax Returns

Don’t know how to get back on track with your returns? Here’s a step-by-step guide.

1. Get The Information Needed for the Past Returns

To file your return, you’ll need:

Income documents, including Form W-2s and 1099s
Self-employment income documents
Investment income documents
Any information related to potential credits and deductions; (be sure to gather records and receipts if you plan to itemize deductions)

If you’re missing income documents from the years you’re filing for, you can request Wage and Income transcripts from the IRS. You also have the option of requesting an extension to give yourself extra time to file your return. If your request is approved, it can prevent certain collection actions.

2. Complete and Submit Tax Returns

Once you have your documents, it’s time to actually prepare the tax returns for the missing years. You can do this yourself with tax filing software, but getting professional assistance can help ensure that your income, estimated payments, and withholdings are accurate. A tax professional can also check to see if you qualify for penalty relief.

When the returns are complete, double-check how and where you’re supposed to submit them to the IRS. Make sure to get proof of filing, as this will serve as insurance in case the IRS misses your return and tries to pursue collection actions.

3. Monitor Return Processing

Check-in with the IRS regularly about the status of your returns. Once they’ve been processed, get confirmation from the IRS that there’s nothing else they need from you. It can take anywhere between three months and a full year to process unfiled tax returns, depending on how long they’ve gone unfiled.

What If You Owe More Than You Can Pay?

If you believe that you owe more than you can pay in full, you still have options for resolving your liability.

Installment Agreements

An installment agreement lets you pay off your liability over a set period. Here are your options:

Long-Term Payment Plans:
- Individuals who owe $25,000 or less may qualify for a 60-month installment agreement.
- Individuals who owe $50,000 or less may qualify for a 72-month installment agreement.
- Businesses that owe $25,000 or less may qualify for a 24-month installment agreement.
Extended-Term Payment Plan: Commonly negotiated by a tax relief firm on a taxpayer’s behalf. The IRS will take your income, liabilities, and expenses into account.

Qualifying for any of these plans is dependent on meeting certain criteria, such as having all of your required returns filed and being current on your tax deposits.

Offer in Compromise

If the IRS believes that you are not and will not be able to pay your liability in full, you may be able to settle it for less than that. This is done by requesting an Offer in Compromise (OIC). You may qualify for an OIC if you are experiencing financial hardship due to a lack of assets and income. Applying for an OIC can be complicated, and OICs are frequently rejected, so your best chance of getting one completed and approved is to have a reputable tax relief firm help you.

How to Get Expert Help

Experienced tax relief firms like Larson Tax Relief can help with a wide range of tax issues, including unfiled returns. We’ve helped over 18,000 clients across all 50 states, and our quality of service has earned us an A+ rating from the Better Business Bureau.

About Larson Tax Relief

Larson Tax Relief is a family-owned and operated tax resolution company that’s been helping individuals and businesses around the US since 2004. With an A+ rating from the Better Business Bureau, Larson is comprised of 65 employees, including 17 federally licensed IRS Enrolled Agents.

One of those agents is Larson co-founder and company president Jack Larson, who is a member of both the National Association of Enrolled Agents and the National Association of Tax Professionals.

About Larson Tax Relief

One of those agents is Larson co-founder and company president Jack Larson, who is a member of both the National Association of Enrolled Agents and the National Association of Tax Professionals.

To learn more, or to get a free evaluation of your situation call us today at 888-589-0955 or fill out our online form below.

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