How Long Should You Worry About Unfiled Tax Returns?

FAQs

July 15, 2022

The IRS has an unlimited amount of time to access unfiled tax returns. Technically speaking, taxpayers should keep their tax records for a long period of time, maybe even forever but in practice, the IRS really doesn’t go back more than six years when enforcing filing requirements. The IRS may ask you to file returns that are older than six years old.

Take A Head Count Of How Many Past Tax Returns You Owe

The first step to making amends with your unfiled years is to get a clear understanding of how many years you’re behind. To do this, you’ll need to contact the IRS and ask them to inform you of how many years they show you as “unpaid.”

This is an important step because it ensures that the information that you have regarding your unfiled years is accurate and provided by a reliable source. It’s a helpful start because it allows the IRS to know that you are making your way toward completing your late filings.

Assessment Statute Of Limitations

For most tax assessments, the statute of limitations is three years. If you filed a return, you should maintain your documents for at least this long in case the IRS chooses to audit your taxes.

The statute of limitations is extended to six years if you fail to report more than 25% of your income on your tax return. Additionally, six years are allotted for the Report of Foreign Bank and Financial Accounts (FBAR) compliance audits.

The Statute Of Limitations For A Refund

You must file your tax return within three years after the initial filing date if you think you could be entitled to a refund. Your refund will expire if you file your tax return beyond this three-year window. The IRS cannot grant you a refund, apply the refund to your unpaid balance, or apply the refund to a future projected payment outside of this three-year window.

How Long Does The IRS Have To Collect On A Balance Due?

The IRS cannot chase you forever due to the 1998 IRS Reform and Restructuring Act. The IRS is no longer permitted to pursue collection of an outstanding balance after this 10-year window, or statute of limitations has passed.

Filing Unfiled Returns

The IRS rarely asks taxpayers to file returns going back more than six years. When you have many years of unfiled returns, the IRS will often be satisfied if you file six years of back taxes and work out a payment plan. However, the IRS does have the authority to request that taxpayers file late returns that stretch back more than six years in some specific circumstances.

Get Help With Unfiled Returns With The IRS Fresh Start Program

Filing delinquent returns is a critical step in the tax resolution process because you can figure out exactly what you owe. Additionally, if you have unfiled returns, the IRS won’t even consider some tax repayment choices.

You can begin working on an installment arrangement, an Offer in Compromise, or another tax settlement method once your past-due returns have been filed.

The IRS Fresh Start Program can work with you on any penalties that you owe due to unfiled years. The IRS Fresh Start Program is an umbrella term for a collective bunch of tax debt relief programs such as an offer in compromise, non-collectible status, installment agreements, etc.

There are installment agreement options available in most cases. You can also ask the IRS for first-time abatement if you have never been late in the filing before.

Resolve Your Tax Bills

If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!