What Happens to Unfiled Tax Returns?

Some taxpayers do not file tax returns because they do not have enough money to pay their taxes. If you continue to do this for several years, your tax liability is growing quickly because there are penalties and interest compounding. How do you address this IRS problem?

Believe it or not, it is so much better to file your late tax returns and owe the IRS tax debt than to not file at all. It's a felony if you do not file a tax return and you owe taxes but there is no criminal punishment if you file but cannot settle your taxes. If you continue to not file your taxes, you may be fined up to $25,000 each year or sentenced to 1 year in prison for each unfiled year.

The IRP or Information Returns Program is an efficient program utilized by the IRS to figure out if you've filed a tax return.

Filing Your Return

• Gather everything together. Organize your W-2�s and other papers together. Ask for copies from the IRS if there are items missing.
• Make your tax returns. Get a tax professional or do it on your own. A tax professional can be available to answer any queries and deal with the IRS if required.
• You may actually get tax refunds even from an unfiled tax return and you can use it to pay for your tax bill, so know of the time limits.
• Fully pay your tax liabilities. You must prepare a plan to let you pay off your tax debts. You will also want to protect yourself from an IRS probe by getting advice from a tax professional and cooperating with the IRS to get your taxes paid. This may need qualification for an installment agreement or Offer in Compromise. A proper plan will allow you to get out from under your IRS problems.
• Avoid IRS issues in the future and research methods with a tax professional to minimize your taxes.

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