If you have not filed your federal tax returns in the last few years, tax season may provide an uncomfortable reminder of that obligation.
For some U.S. persons, filing a tax return is not required. Before assuming this means you, be sure to understand who is required to file.
Otherwise, you may be one of many taxpayers who have their reasons for failing to file a tax return. Some people stop filing their taxes or claiming returns and it becomes habitual. Others just choose not to file. Regardless, if the Internal Revenue Service (IRS) considers you eligible to pay taxes and file tax returns, it is worth understanding the steps to address the situation.
The longer you have not submitted a tax return, the more complex your tax situation may become. The IRS has many processes at its disposal—including preparing your tax return for you—in order to collect taxes due. The IRS has a look-back of one decade to collect your unpaid taxes—and there are several caveats to that.
The point at which the collection period on 10-year-old back taxes expires is called the Collection Statute Expiration Date (CSED). The CSED usually occurs ten years from the date of tax assessment and can be suspended or extended given certain events like filing for bankruptcy, entering an Installment Agreement, requesting a Collection Due Process hearing, or other events.
If you are long past due on filing income tax returns, there are straightforward steps you can take to avoid fines and potential criminal tax charges. In instances where the IRS will necessarily be involved, such as lengthy failure to file and pay past-due tax, working with an experienced accountant or tax attorney is advised.
If you have not filed for two years or ten, consider these tips:
- If you did not file a tax return for one or more years, the IRS may have done it for you. When calculating your taxes, the government does not include deductions or credits you may have earned. They assess the tax and forward you a notice CP3219N. There is a process for objecting to a substitute return—but first, you will need to learn your status from the IRS. There are different types of transcripts you can request that could be of help in gathering information.
- Determine what returns you are missing and collect documentation to file your returns. Do not file a false income tax return in order to avoid tax due—the IRS will likely match your return with other documents and uncover it. In a worst-case scenario, you could be charged with tax fraud. Remember that if you are due a refund, the IRS does not pay refunds after three years from the due date of a tax return. Be aware your tax bill will include penalties assessed for failure to file and pay.
- If you have a sizeable tax liability, working with a tax professional is your best bet. Be sure to fully understand your obligations for any payment plan into which you enter with the IRS.
Catching up on missing tax returns can be a long process. If you have unfiled tax returns, the time to start looking into the problem is now.
Speak with an experienced tax attorney about tax litigation, compliance, or allegations of tax evasion
If you are contacted by the IRS, contact us at Robert J. Fedor, Esq., LLC for a confidential consultation. With offices in Cleveland, Ohio, and Chicago, Illinois, we deliver aggressive legal representation to resolve your tax concerns. Contact us or call 800.579.0997 today.