What if I have unfiled tax returns?


IRS back tax relief
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According to CNBC, 61% paid no federal taxes in 2020. Unfiled tax returns are those that were not submitted despite legal requirements. It is highly recommended by professional tax consultant that you submit any outstanding tax returns as soon as possible. Filing on time is important to get the most out of your tax refund so you can claim your share of exemption and deduction credits.  If you are not able to pay taxes on time, then you can take tax agent services or opt for IRS back tax relief by filing all or part of your past-due returns.

Advantages of filing unfiled taxes

1. You can apply for IRS back tax reliefs options:

The IRS offers various back tax relief options like offer in compromise, IRS payment plans, or taking tax agent services that offer help to taxpayers in distress. 

2. Reclaim a tax refund:

To get a refund for withheld or estimated taxes, you must file your return within three years of the due date. If you do not file your return, you risk losing your refund. The same logic applies to tax breaks such as the Earned Income Tax Credit.

3. Prevents Identity Theft:

If someone possesses your Social Security number. They can access the information needed to submit a tax return in your name. This scam occurs early in the tax season. Make every attempt to conceal your SSN, and file your taxes before everyone else.

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4. Safeguard Social Security Benefits

Suppose you are self-employed and do not file an income tax return. In that case, your self-employment income will not be reported to the Social Security Administration, making you ineligible for Social Security retirement or disability benefits.

5. Avoid Problems When Obtaining Loans

You must provide copies of your tax returns to financial institutions, mortgage brokers, and others if you want to buy or refinance a home, get a business loan, or apply for federal student aid. Your loan approval may be delayed if you do not file your tax return.

How do I know I have unfiled taxes, and What will happen?

If you haven’t filed your taxes, you will receive a CP59 notice from the IRS. You receive this notice because IRS has no record of you filing your previous personal tax return or returns. 

The IRS will prepare a substitute for return if you have unfiled tax returns. The IRS prepares your tax return based on information already in their possession, such as W-2 and 1099 forms. Unfortunately, the IRS will not prepare a return on your behalf that benefits you. The IRS does not take advantage of all available deductions and credits. It’s usually your worst-case scenario. Even if you still have an unfiled return, once a substitute return is filed, the IRS begins tax collection efforts! The IRS has the authority to garnish your wages, seize your bank account, or file a federal tax lien against you. The IRS will assess penalties and interest on your account if you have unfiled tax returns.

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The IRS letter will also specify the income sources utilized to compile the replacement returns. 

What to do if you have Unfiled taxes?

The answer is simple: file your taxes. If IRS has filed a substitute return on your behalf, then you have 30 days from the letter’s official date to perform the following:

  • Submit a completed tax return.
  • Send in a letter of authorization for the assessment and collection form.
  • Send a letter to the IRS explaining why you were unable to submit your taxes.

And if you want to avoid the letter and penalties from IRS, then the answer is simple- file your taxes as soon as possible by following the further steps:

  • Collect all of the information required to file the past-due return. 
  • Fill the form as accurately as possible
  • Observe return processing and compliance
  • Or hire help from professionals

How can tax professionals assist with unfiled returns?

It is best not to wait too long before contacting a tax lawyer. You may have filed your returns in the past, but is it possible that you missed something? If you think this might be the case, then you need to contact for assistance today. 

If your records are missing, you can reconstruct earlier returns using various alternative sources. The IRS will levy penalties and interest on unpaid taxes if you fail to file a return by the deadline. To avoid the accrual of compounding interest, your tax liability should be settled as soon as possible. If you have not filed your tax returns for the three most recent years, we strongly advise you to do so as soon as possible. If you owe refunds for any of those tax years, you can only get them if you file your return.

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Abhay Singh

Abhay Singh is a seasoned digital marketing expert with over 7 years of experience in crafting effective marketing strategies and executing successful campaigns. He excels in SEO, social media, and PPC advertising.