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Haven't Filed Taxes in Years? Here's What to Do

By Ephrat Livni, Esq. on February 02, 2016 | Last updated on March 21, 2019

Plenty of people have tax problems, rich and poor, and many people, no matter how much money they have, take a similar approach. They ignore the problems for as long as possible.

So if you are one of these people, you have company. But you should address your issues and the Internal Revenue Service is certainly willing to accept late filings.

Working It Out

You have 3 years from a tax return due date to make a claim. So if you are owed money and did not file taxes, you must act within the 3-year period to receive funds. If you do not collect, the money is absorbed by the Treasury.

But what if you do owe money? The IRS can file a substitute form on your behalf, and this one is unlikely to credit you with all your exemptions and deductions. When you do not file taxes or respond to requests from the IRS, it may assess you and make a demand on an amount that is far greater than what you actually owe. This will trigger a tax bill and if you do not pay the proposed return, the IRS can levy your wages or put a lien on your property.

If you owe more than you can pay in back taxes, you can enter into an installment agreement with the IRS that allows you make monthly payments for a period of time instead of paying in full. You are better off making partial payments and being in exchange with the government than trying to hide from the IRS.

Lasting Liability

Not filing taxes does not really solve problems, it just means that they hang around longer. For example, the IRS has three years within which to audit a return. But that does not run until you file, so all your unfiled returns are still subject to review and inspection.

That said, the IRS has only six years to criminally charge you for failing to file a tax return, so practically speaking it's probably not a huge problem if you failed to file 7 or more years ago. You won't get locked up for it ... unless an investigation began before the six years ran and you owe an enormous amount of money.

Get Help

Taxes make people nervous. If you are just too afraid to face your tax problems but want them resolved, just buck up and call a tax attorney or a CPA for a consultation. Lawyers are accustomed to hearing all kinds of stories and are difficult to shock -- so talk frankly and see what your attorney can do to help.

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