Mike says, ‘‘Do not panic if you have tax returns piling up’’: Know why

Do you have years of unfiled tax returns? Then you’re certainly not the only one.

Countless taxpayers face the daunting task of catching up on multiple years of unfiled returns. Various reasons contribute to this backlog: personal crises, financial hardships, health issues, or simple oversight. In the hustle and bustle of modern life, where circumstances can change rapidly, falling behind on tax filings can happen to anyone.

The silver lining? Solutions are available, and resources abound to help individuals get back on track. Whether it’s seeking assistance from tax professionals, using software tools, or reaching out to the IRS for guidance and potential payment plans, paths to resolution are within reach.

From Perspective of Former IRS Agent: How To Prevent Unfiled Tax Returns?

  • File your tax returns on time. The deadline for filing individual tax is usually 10-15 working days. You can request an extension if you cannot file by the deadline.
  • Pay your estimated taxes if you are self-employed or have other income that is not subject to withholding. Estimated taxes are quarterly payments made to the IRS throughout the year.
  • Keep good records of your income and expenses. This will help you prepare your tax returns accurately and on time.
  • Hire a tax professional if you need help preparing your tax returns. A tax professional can help you understand the tax laws and ensure your returns are filed correctly.

IRS Policy Statement 5-133: IRS Enforces the Six-Year Rule!

IRS Policy Statement 5-133 provides a general rule that taxpayers must file six years of back tax returns to be in good standing with the IRS

The IRS uses a variety of factors to determine whether to enforce the six-year rule, including the following:

  • The taxpayer’s prior tax compliance history
  • The amount of tax owed
  • The reason for the delinquency
  • Whether the taxpayer is cooperating with the IRS

Common Exit Strategies For Unfiled Tax Returns

Streamlined Filing Compliance Procedures
Consider using the IRS’s Streamlined Filing Compliance Procedures (SFCP) or Offshore Voluntary Disclosure Program (OVDP). These programs offer taxpayers who have unfiled tax returns a way to comply with the law without facing harsh penalties.

Negotiation with the IRS
If you cannot pay your taxes in full, negotiate a settlement with the IRS. The IRS is willing to work with taxpayers to develop a settlement agreement that fits their budget.

File A Petition With the Tax Court
If you cannot negotiate a settlement with the IRS, you may need to file a petition with the United States Tax Court. The Tax Court is a federal court that hears disputes between taxpayers and the IRS.

Step-By-Step Guide: Chance To Resolve Unfiled Tax Returns

  • Gather your documentation. This may include tax returns, W-2 forms, receipts, and other financial records.
  • Determine which years you need to file. The IRS requires taxpayers to file six years of back tax returns to be in good standing. However, the IRS may go back more than six years in certain instances, such as when the taxpayer has a history of noncompliance or evidence of fraud.
  • Prepare your tax returns. If you are uncomfortable preparing your tax returns, you can hire a tax professional to help you.
  • File your tax returns. You can file your tax returns electronically or by mail. If you cannot pay your taxes in full, you can file your returns anyway and set up a payment plan with the IRS.
  • Pay your taxes. If you cannot pay your taxes in full, you can negotiate a settlement with the IRS. You may also be eligible for an IRS back tax relief program, such as the Streamlined Filing Compliance Procedures (SFCP) or Offshore Voluntary Disclosure Program (OVDP).

Mike’s Quick Tips For Resolving Unfiled Tax Returns:

  • Be honest and transparent with the IRS.
  • Be cooperative and timely in your responses to the IRS.
  • Be organized and keep good records of your documentation.
  • Be patient and persistent. Resolving unfiled tax returns can be a complex and time-consuming process.

If you are facing unfiled tax returns, taking action as soon as possible is important. The longer you wait, the more difficult and expensive it will be to resolve the issue.

Resolving Unfiled Tax Returns With Confidence

Staying current on your taxes and making timely payments is essential for individuals and businesses. It helps you avoid penalties and interest, liens and levies, and damage to your credit rating. You can now file your tax returns ag ease without having to worry about penalties.

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Author

Mr. Michael D. Sullivan

Michael D. Sullivan is the founder of MD Sullivan Tax Group. He had a distinguished career with the Internal Revenue Service for 10 years. As a veteran IRS Revenue Officer / Agent, he served as an Offer in Compromise Tax Specialist and Large Dollar Case Specialist.

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