Why You Must File Unfiled Taxes

Why You Must File Unfiled Taxes

Are you a taxpayer who has not filed all the proper returns in the past? If so, you may think that you can let this slide and simply move forward as you should in future years. Unfortunately, this is not true. It is important that you file any unfiled taxes from past years. Simply put, if you do not file your taxes the IRS is going to recognize you as a non-filer, which is obviously not a good thing. It does not matter why you have not filed in the past. What does matter is that you rectify this situation at once.

The number one reason to file back taxes is that you do not want to continue to accrue penalties. Remember, the IRS is not going to give up on you and let you go unscathed. If they did this with you they would have to do so with millions of other people. If you have yet to file a past return you are going to owe penalties in most cases. And the longer you wait the more money you are going to owe.

Did you know that if you owe back taxes and do not file a return that criminal charges can be brought against you? So even though you may think that this is a no big deal, you may find yourself in trouble with the law. For each year that you did not file you can be sentenced to one year in prison and/or a fine of up to k. And of course, you will still owe the IRS penalties and interest as well.

Even if your return is late and you cannot afford to pay the money that you may owe, you still need to file. It is better to do this before the IRS notifies you that they are onto your situation. By simply filing you can stop additional penalties from accruing. This alone should be enough to show you how important it is to get moving today.

Now do you see why you must file unfiled taxes? The longer you wait the more money you are going to owe. Not to mention the fact that you may be faced with criminal charges.

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Unfiled Income Tax Returns- Don’t Ever File Them!

Unfiled Income Tax Returns- Don’t Ever File Them!

Never send the IRS your unfiled tax returns. Why? Filing them without knowing your collection and return status could be costly.

If you’ve filed all your previous returns and don’t owe any money, and you can full pay any balance shown on this return, then you can file it now without a problem.

If there are other years not filed and you owe on any of them, or you owe on past years, you should find out your current status with the IRS collection division before filing. You or your power of attorney should get your record of account for many prior years.

The record of account will show the charges and payments to each year. It will also show if you filed or the IRS filed a return for you. If any of the years indicate that you didn’t file, the a return needs to be filed. But… WAIT… Not Yet.

If you have any unfiled returns that show up on your record of account, your payment plan, if you think you have one, is invalid! Make sure you are able to discuss how you will make payments to pay off all of the outstanding balances. The trick is to get all delinquent liability years included under one agreement. This will stop future collection action, assuming you file and pay your taxes, and make your monthly payment on time.

Calling the IRS will also determine if they are in the process of preparing a return for you. If so, they will have a special address for you to send the return to. This will prevent you from having to undo it later. Or worse, the rejection of your newly filed return.

So be prepared to discuss your current financial situation. It’s best to have your income and expenses on a monthly average basis calculated already.

Getting your record of account to verify what is under your social security number will not alert the IRS that you are delinquent. Knowing your current status with the IRS concerning your filings and payment history is essential.

When you are ready to file your unfiled returns and you are missing information, you can request a record of information sent to the IRS from third parties. This includes W-2′S, 1099′S, K-1′S, etc. You are also allowed to estimate amounts that you can’t calculate. There is an art to preparing unfiled returns. Make sure you have help from a tax preparer experienced in this area. I have made corrections to many poorly prepared returns that would probably have caused an IRS audit.

In conclusion… Do not file any unfiled personal income tax returns without first requesting a record of account from the IRS and making sure that you understand what has been filed, if the IRS filed it, and how you are going to present your arguments for paying back the liability.

You probably want to consult an expert advisor before you take any action in thesematters.

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Unfiled Income Tax Returns- Don’t Ever File Them!