Unfiled Tax Returns
Most taxpayers are required by law to file their taxes on a yearly basis. However, it isn’t difficult to slip up. And if you do, the IRS can impose harsh penalties or withhold your refund.
If you have unfiled tax returns, file them immediately — regardless of whether or not you can pay in full. Here’s why:
You may still be entitled to a refund.
If your returns are less than three years overdue, you are still entitled to the respective refunds.
You can protect your social security benefits.
If you do not file your taxes, your income won’t be reported to the Social Security Administration and you will not receive social security credits.
You can avoid issues when obtaining loans.
Loan approvals may be delayed if you are not up to date in regards to your tax filing.
You can avoid a substitute return.
The IRS may file a substitute return for you if you don't file. This entails a return which won’t give you credit for deductions or exemptions you are entitled to.
How to File Unfiled Tax Returns
First, request your wage and income transcripts from the IRS. You should also order your account transcript. Then, gather any documentation or information regarding income not on file with the IRS (such as investments or self-employment income).
If you have multiple unfiled returns, the IRS will want the current return and up to six years of unfiled returns before you can regain good standing. However, this may be subject to change depending on your unique circumstances.
Then, you must complete the return(s) and submit them to the appropriate IRS unit. Make sure to attach a penalty relief form, if applicable (if you have multiple unfiled returns, it will be much more difficult to manage the penalties and balances owed). Retain proof of submission in case the IRS takes actions against you in the meantime.
Afterwards, periodically request transcripts from the IRS to ensure that they are processing your return. If the IRS took prior action, such as submitting a substitute return, follow up to ensure that the case is closed.
If this process seems overwhelming, your best bet may be to enlist professional help. With an A+ rating from the BBB and over $700 million in resolved tax debt, IRS.com strongly recommends the tax experts at Community Tax to help guide you through this process.
Connect With A Tax Professional
Tax professionals can help if you have tax issues or owe money to the IRS. Get a free consultation.
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