There are many reasons why you may have unfiled tax returns. Perhaps the most common sense is that you didn’t know what to do with them once they came in the mail, or maybe your busy schedule has prevented you from taking care of it yet.
Regardless of why you haven’t filed your unfiled tax return, this blog post will give some helpful pointers on getting started with unfiled tax returns help.
Don’t allow unpaid tax returns to build up and snowball into a stressful financial and legal situation.
Furthermore, if you can get your issues with the IRS straightened out, you could be eligible for a nice refund on the other side.
IRS debt forgiveness options
Filing taxes is not a mistake to be avoided because you are afraid you won’t be able to pay what you owe in taxes. You can only apply for IRS debt relief and forgiveness if you’ve completed all of your current tax obligations.
When the IRS notifies you that you have unfiled taxes, it’s critical to understand what’s going on behind the scenes.
When you don’t submit your income tax returns with the IRS/state, you run the danger of facing tax difficulties. If you ignore many notifications to file a tax return, the IRS/state will issue a Substitute for Return (SFR) to you.
The IRS/State takes your reported income, such as wages, interest income, subcontractor payments, property sales, and so on, and presumes you’re single with no dependents.
Can you file bankruptcy if you haven’t filed taxes?
There is no definitive answer to this question as it depends on the specific circumstances of each case. However, you cannot file for bankruptcy in most cases if you have not filed taxes.
This is because bankruptcy proceedings are often based on financial information that is provided by the filer, and the court will not be able to assess your eligibility for bankruptcy if you have not filed taxes.
That said, there are some exceptions to this rule. For example, you may be able to file for bankruptcy if you can demonstrate that you could not file taxes due to extenuating circumstances (e.g., illness or natural disaster).
Essential Things to Know About Unfiled Tax Returns
An un-filed tax return is a tax return that has not been submitted despite the fact that you were required to do so by law. It’s in your best interests to file any outstanding taxes.
The advantage of filing on time is that you will be able to claim all of the credits for exemptions and deductions that are owing to you. If the IRS files a substitute return on your behalf, it is probable that it will not give you the credits you are entitled to.
The IRS will file your return in a manner that benefits the government, not you. When the IRS steps in to fill out your return for you, here is how the process works:
- If you don’t file your tax return, the IRS will send you an IRS Notice of Deficiency, which will propose a tax assessment. You have 90 days to submit your past-due return.
- You may also utilize your 90-day period to file a tax court case.
- To avoid IRS penalties, you must file an income tax return and/or pay any applicable taxes. If you do not submit a tax return or pay your appropriate taxes, the IRS may proceed with its proposed assessment.
Working with a tax professional to submit any outstanding returns is a far superior alternative.
Self-Employed Unfiled Tax Returns
If you’re self-employed and don’t file a tax return, your Social Security payments may be reduced.
If you do not file your taxes on time, the Social Security Administration will not receive any information about your self-employment income.
Failing to file is like throwing away future retirement and disability payments that you’ve earned through your hard efforts.
There are also immediate financial repercussions for not filing a tax return. When you apply for a mortgage, seek to obtain a loan, or apply for federal assistance for tuition, lenders, brokers, and financial institutions will be notified of your non-filing status.
Can the IRS send you to jail?
Furthermore, if you don’t file a return, the IRS may impose significant penalties. There’s also the chance of facing tax liens, wage deductions, and even criminal prosecution if things get out of hand.
Can You Get a Tax Refund for All Unfiled Tax Returns?
If you’ve never filed your return and have a tax refund coming, it’s possible that you’ll be able to get one. However, in order to qualify for any reimbursements owing to them, taxpayers must file their returns within three years of the date they were due.
The three-year rule also applies to any tax credits you may be due. The good news is that if you’re within the three-year period, there’s still time to benefit from it and receive money back.
There is a little gray area when it comes to the IRS’s statute of limitations on unfiled tax returns. The IRS has the authority to examine any year you did not file and assess penalties.
The IRS does not, however, frequently retrace more than six years when auditing tax liabilities. That doesn’t imply you won’t be hit with penalties before the six-year period is up.
Unfiled tax returns failure-to-pay penalty.
The IRS may impose a severe penalty if you don’t pay your taxes on time. For each month that your return remains unreturned, the IRS assesses a 5% failure-to-pay penalty.
The bottom line is that you should be ready for the IRS to request you to file income tax returns for any delinquent years within the previous six years while you attempt to get up to speed.
Are Unfiled Tax Returns Illegal?
Failing to submit a required tax return is considered a felony. Unfortunately, those who do not submit their taxes may face up to a year in prison.
If you act right away, you may prevent that from happening. If the IRS offers options to help you clean your record, there’s no need to get it to that point if you utilize these services.
How to Fix Unfiled Tax Returns
It’s critical to submit any outstanding tax returns as soon As possible. You may be hesitant to submit because you anticipate an hefty tax payment.
If you fail to file your taxes, the IRS may impose levies and seizures on you. What should you do if your returns have not yet been filed? The quick answer is to get them submitted as soon as possible!
Yes, even if you’ve neglected to pay your taxes for a few years, the IRS has a procedure for doing so.
Unfiled tax returns IRS representatives filed as substitute returns for you will usually be adjusted to reflect the deductions and credits you’ve claimed on your updated return.
Fix Unfiled Tax Returns Steps
If you’re looking for a way to deal with unpaid taxes, you’ll need to follow the IRS’s specific instructions for your situation.
Here’s what the process will generally look like:
- You’ll send in your completed tax return.
- You’ll send an accompanying letter consenting to the assessment and collection form.
- You’ll mail an additional explanatory letter regarding your failure to file.
When it comes to things like the statute of limitations on unfiled tax returns, the IRS manager assigned to your case has a little bit of leeway.
The IRS is primarily concerned with the amount of money coming into a company and how it is being spent. Managers typically look at things like the degree of flagrancy involved, any history of noncompliance, the potential for income from illegal sources, and the amount owing in taxes.
The procedure is most likely less unpleasant than you imagine if you don’t have any other unusual circumstances apart from missing your filing deadline.
Getting your taxes done professionally each year is the greatest method to avoid having another tax problem.
Our tax experts can help you navigate your unpaid taxes, figure out how far back you must file, ensure that your filings are correct, and ask for any possible penalty forgiveness.
Do You Need Unfiled Tax Returns Help?
Unfiled taxes never go away on their own. The good news is that you still have a chance to align yourself with the IRS.
Our team of qualified tax lawyers, CPAs, enrolled agents, and tax experts is here to assist you.
Tax Professional for unfiled tax returns…
It is in your best interests to have your personal and business tax returns prepared and submitted on time each year. Even if you are behind on submitting previous years’ tax returns, We can assist.
The IRS will eventually discover your tax noncompliance. The fines and interest the IRS may charge you as a result of unpaid taxes, which have not been submitted, would soon transform your tax position into a nightmare.
If you don’t pay your taxes, the IRS will take severe steps to recoup any unpaid amounts, such as seizing your wages or placing levies on your bank account or Social Security benefits.
Don’t let this happen to you! Call today.
