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All U.S. citizens, residents (tax and legal residents), and even non-residents (if they have US-source income) that meet the filing requirements for a tax return must file a U.S. tax return on their worldwide income. And, in many cases, a state tax return as well. If you have a filing requirement and unfiled tax returns, your tax problem may never disappear. If you haven’t filed your tax return for many years, the fear and paranoia of having unfiled tax returns have paralyzed you into inaction and procrastination. Yes, your tax problem may never go away. But, it will go away if you get help and file your returns. So will the fear and paranoia.

Unfiled Tax Returns

Consequences Of Unfiled Tax Returns

The statute of limitations for a federal return does not start until all unfiled tax returns have been filed. Further, the resolution of any tax problems, in addition to the unfiled tax returns, cannot be resolved until the unfiled returns have been filed.

If you have an unfiled tax return, you can suffer additional consequences, including:

  • Delay in receiving a refund: a refund will not be issued until all unfiled returns have been filed
  • You will have an assessment of penalties and interest for any tax owed
  • The IRS or state may file a return on your behalf known as a Substitute for Return (SFR). It generally will result in more tax owed vs. a prepared and filed return. This is because the incorrect filing status may be used, and credits and deductions could be understated.
  • Collection actions: If there is a substitute return and there is a tax liability, the tax authority will start collection efforts to obtain the amount due
  • Loss of refund: if you don’t file a return to claim a refund that you are due by the statute of limitations deadline, you will lose the refund. For example, for your federal return, you have three years from the regular due date of the return to request a refund from the IRS by filing your unfiled return.
  • Grief and stress from your spouse, fiancé, or significant other in having these unfiled returns hanging over your head
  • You are not being eligible for student loans for yourself, your spouse, and your dependents.
  • Inability to obtain a loan, mortgage or mortgage refinance
  • Many sleepless and restless nights

But don’t be afraid of the dark or the unknown. Meet the tax problem head-on and get back into compliance even if you have a challenge with gathering tax records.

Losing Your Tax Refund

For your federal return, generally, you have three years from the due date of the return to file a claim for the refund by filing your tax return. If you don’t file within that statute of time to claim the refund, the government will keep your refund.

What Should You Do If You Have Unfiled Tax Returns

File your tax return and do so on time. If you owe taxes and don’t file, the penalties incurred for not filing are significantly higher than the penalty assessment for not paying. Thus, even if you currently can’t pay, at the minimum, file. However, the sooner you can file and pay, the better.

How Many Years Of Unfiled Tax Returns Should Be Filed

While there is no hard-and-fast rule regarding how many delinquent returns must be filed, the consensus is at least six tax years since the applicable criminal statute of limitations for most tax-related crimes is six years. Initially speaking, though, six years is what the IRS will expect.

Section 4.12.1.3 (10-05-2010) Enforcement Period – Policy Statement 5-133 (P-5-133), IRM 1.2.14.1.18, Delinquent returns—enforcement of filing requirements, discusses delinquent returns and the enforcement filing requirements. The enforcement period is not to be more than six years. See Section 4.12.1.3.

This is ultimately a decision that you need to make. However, we recommend filing unfiled tax returns and FBARs for at least six years.

In addition, we would recommend we do some background work to determine what information the IRS and State have on file for you.

Nevertheless, you should consider filing all delinquent returns as there is no civil statute of limitations period for assessing tax on an unfiled return. Still, in most circumstances, the IRS will request no more than six years’ worth of returns.

The IRS Or State May File A Tax Return On Your Behalf

The IRS may file a Substitute for Return (SFR) if you don’t file a timely return. Most states have a similar process, although it may have a different term. In most cases, since the tax authority will lack information about you, such as deductions, credits, etc., the resulting tax liability will be higher than if you filed your return.

Am I Alone In Having Years Of Unfiled Tax Returns?

While certainly, you may feel that you are alone in facing your tax issues. The reality is no; you are not alone. Countless others have years of unfiled tax returns. It is so common that there are laws, rules, procedures, and standards of practice that tax resolution professionals adhere to with unfiled tax returns to bring about the most optimal result.

While it is not a problem that will disappear miraculously, millions of taxpayers with unfiled tax returns have taken the confident first step forward to get back into compliance with their tax filings. It may be daunting, but the process is generally smooth and stress-free with professional assistance.

Should I File Delinquent Returns Myself?

When my car is having problems, I know it. There are symptoms that I may or may not know how to address and fix. But with the complexity and all the technology in today’s cars, I have a professional to fix my vehicle. Because I know they will do it right, and they won’t overlook anything necessary to fix my vehicle – as long as I have selected a professional with an excellent reputation and superb experience. It’s the same with taxes, perhaps even more so.

We have decades of experience in the tax industry and know what is necessary to fix and what doesn’t. We know the tax code and the IRS and state tax authorities exceptionally well. This backbone of your tax representation helps bring about the best possible outcome for you. The IRS and state authorities always work in their best interest – unfortunately, not yours. We work for you – for your interest to provide you with the best results for your unfiled tax returns.

Will I Have To Talk With The IRS Or States?

No. As our client, our job is to do all the legwork, including all those aggravating hours on hold waiting to speak with the IRS or state. You will not have to talk to the IRS or correspond with them. We will handle it all.

Peace Of Mind Tax Help Tax Resolution Support

One of your most important rights as a taxpayer is to have a qualified tax resolution professional, such as an Enrolled Agent (EA), represent you in front of the IRS and/or States and provide tax resolution.

When you hire Peace Of Mind Tax Help to assist you with your IRS and/or state unfiled tax returns, we will guide you through the preparation process while advocating on your behalf and protecting your interests.

Peace Of Mind Tax Help is here to help you because when you’re dealing with unfiled tax returns, the worst thing you can do is do nothing at all. The best decision is to take the necessary first step and file your returns now!

Our goal is to ensure that you pay the least amount of taxes you are legally liable for.

Click on the “Get Peace Of Mind” button at the top of the page to take that first step.