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William Perez

QnA about Filing Back Taxes

By February 17, 2005

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Every year I have new clients who need to file late tax returns, usually 3 to 5 years at a time. Last year, I had four clients each needing to file tax returns for 10 years. This year, I've already helped two 10-year clients. Believe it or not, filing a late tax return isn't a whole lot different than filing a current year tax return. Sure, there are some extra things to think about. But on the whole, the process can be smooth, quick, and relatively stress-free. Here's some tips from my hard-earned experience.

First things first, as the saying goes. You need to track down missing tax documents. This is usually accomplished by calling the IRS and asking them to mail or to fax you a "payer transcript" for the years you haven't filed. A payer transcript is a printout of information from W-2 forms, 1099 forms, and other tax documents filed with the IRS. This information is generally accurate and reliable. The payer transcript is limited, however. It does not contain any tax information related to the state (such as state income tax withholding). So, call your state tax agency to obtain any information about tax withholding.

Step two, prepare your tax returns. Download tax forms from the IRS and state tax agency websites. Or purchase tax preparation software for previous years.

Step three, prioritize your tax returns. Tax refunds have expiration dates. Generally, you have three years from the original due date to file a tax return and claim a tax refund. For example, your 2001 tax return was due on April 15, 2002. 2002 plus 3 equals 2005. You have until April 15, 2005, to file your 2001 tax return and still get a refund.

This is very important, listen up. File your 2001, 2002, and 2003 tax returns as soon as humanly possible. You can still get refunds for those years. If time is of the essence, file your 2001 tax return ASAP. The other years (2002 and 2003) can wait a little while longer. The last thing you want is to lose your refund because the time limit expired.

Step four, file the rest of your returns. There can be strategies for prioritizing your filing if you need to spread out the work over a longer period of time. But in general, once you've filed your 2001 return, you can go back and file in chronological order. This is generally the method I recommend because you get to take care of the oldest years first, and secondly because some of the later years you can still wait a few weeks to complete.

Step five, know your penalties. There are three different penalties applied to late tax returns. Pay attention to these penalties, they are very important. Just as important as knowing the 3-year expiration deadline. You absolutely must know this: if you have a refund, there are no penalties. Let me repeat this for emphasis: REFUND = NO PENALTIES. Why? The tax code is very clear about this. Penalties are calculated on the balance due. If there's zero balance due, or a refund, there's no penalties to calculate. Twenty-five percent of zero equals zero!

So, when preparing your tax return, aim for a refund. If you can dig up enough receipts to itemize, go for it. If you went to school that year, be sure to tax an education credit. If you got married, got divorced, or had kids living at home, be sure to take all that into consideration.

Let me say this another way. Let's say you are preparing your 1999 tax return. Now, your tax refund, if any, for 1999 has expired. It's beyond the 3-year deadline. That means if you had a refund, you won't get a refund check from the IRS. But showing a refund on the tax return also means no penalties for filing late! You really, really, really want to show either a zero balance (breaking even) or a refund. It doesn't matter if it's a small refund or a big refund. So, once you are in a refund territory, stop and mail your tax return.

What if you owe? Here's what you are facing. First, review the penalties: failure to file on time, failure to pay on time, and interest on the amount owed. Interest rates change every quarter, but you can guesstimate between 5% and 10% in annual interest. The late payment penalty is 0.5% (half of one percent) per month for each month your tax bill is not paid in full. Now for the biggie. The failure to file penalty is 5% of the tax due per month for each month the tax return is late, up to a maximum penalty of 25% of the tax due. You reach the maximum late filing penalty after just five months. (Note to future self: if you anticipate being late, file an automatic extension and a second extension. That will give you until October 15th to file a return.) So, using the example of a 1999 tax return with a balance due. You are already five months late, so add 25%. Add another 0.5% for every month you are late for the late payment penalty. (So, if you are 60 months late, that would be 60 x 0.5% equals 30%.) Plus add interest on the balance due for each year you are late (another 5% to 10% per year). On a five-year old tax return, this can easily double your balance due.

All the more reason to maximize those deductions on a late tax return. The smaller your balance due, the smaller your penalties.

Now, going back to your filing strategy. Let's say you have prepared five years worth of tax returns (1999 through 2004). In 2001 through present you are getting refunds, but you owe for 1999 and 2000. There's a three things you can do.

Option 1: file all the returns at the same time (but in different envelopes), and mail in a check for the balance due per the return. The IRS will send you lots of mail, and will calculate your penalties and interest on the balance due. Some of the refunds may be withheld to pay the back taxes. Or you may receive refund checks before the IRS processes your older tax years. Pay off your back taxes as quick as possible.

Option 2: file the older years first, plus the 2001 return to protect your refund. Wait for the tax returns to post, and for the IRS to calculate your penalties. Then send in the later tax returns with refunds, and allow the refunds to be withheld to pay off the balances from earlier years. Then, when the IRS has processed everything, see how much you still owe and make arrangements to pay it off as quickly as possible.

Option 3: file the more recent years first, including the 2001 return, to obtain your tax refunds. Then, file your older tax returns and use your refund money to make large payments with the tax returns.

Because the IRS takes longer to process older tax returns, all three options take about the same amount of time. How you want to proceed depends a lot on your individual tax situation, and how you want to handle the cash flow problem. Generally speaking, I have found it really doesn't make a whole lot of difference which strategy you use to mail in your tax returns. In the end, it still takes a long time, and you still need to make payment arrangements to keep the IRS from harassing you further. So unless there's some other compelling reason, I recommend people file all their tax returns at once. Send them to the same IRS service center. But mail them in separate envelopes. Send them by certified mail. And keep the certified mail receipt as proof you filed your tax returns.

Comments
May 23, 2008 at 1:49 am
(1) Jordan says:

I know its impossible to say when exactly but I was wondering approx. how long it takes to get late filed tax refunds back? This year I filed 02-07 and I owe ZERO and both federal and state owe me for each year I filed (about $4,000 total).
After reading the article above, are you saying I will not be penalized for filing years late?
What kind of penalties could I APPROX owe and how soon will it take to get the $$$$?

June 6, 2008 at 2:22 pm
(2) taxes says:

Jordan, First, it will be important to know which day you filed your returns. Because April 15, 2008, was the last day to file a return and get a refund for the year 2004. That’s because there’s a three-year time limit on refunds. You are getting refunds for 2005, 2006, and 2007. The earlier years (2002, 2003, and possible 2004 depending on when you filed) are no longer refundable. Since you had refunds for all years, there won’t be any penalties or interest, because those are calculated based on a balance due. If there’s no balance due, there’s no penalty.

As for the refunds, they can take quite awhile for the IRS to process. Typically, I would expect the IRS to issue you written responses in approximately 8 to 12 weeks. I have just this month (June) been getting notices from the IRS for returns I filed in early April, and that’s about 8 to 10 weeks after we have filed.

You’ll also get letters from the IRS in addition to refund checks. You’ll get one letter for each year you filed saying that the IRS processed your tax return. If they previously assessed any taxes or penalties, the letters should also state that the penalties or tax were recalculated based on what you filed. So, I would expect the refund checks to arrive later than the notices, give this about 12-16 weeks.

The reason for this long time period is this is the busy time for the IRS. They process current year tax returns first before handling earlier years, and there’s fewer workers who are skilled in processing the older returns. And even after the return processing, the IRS has to do some extra processing and checking to make sure your money gets to you.

If you haven’t heard from them after 12 weeks, I would call and find out what’s going on.

June 10, 2008 at 5:48 pm
(3) Mike says:

I am a state and federal nonfiler since 1995. I have a concern that requesting a payer transcript from the IRS and similar forms from the state will immediately alert those entities to my nonfiler status. Would you advise involving a tax attorney, or one of the so-called ‘tax professionals’, or even a CPA for someone like myself who has a very real concern about facing potential consequences from the IRS?

June 10, 2008 at 6:21 pm
(4) William says:

Mike, The IRS and the state already have the ability to tell whether or not you filed a return. The issue really isn’t about letting them know you haven’t filed. The thing to worry about is the agencies trying to extract all sorts of irrelevant information when all you need at this point are copies of your tax documents. Let them know that you are going to be filing all your returns, but you need your “wage and income transcript.” For the state, you’ll need your state tax withholding figures. They might also have copies of your W2 as well.
The tax agencies might have assessed some taxes and penalties already. Be sure to get a break down year by year. Also, ask the agencies for a temporary hold on collections until you can file, and then set a reasonable deadline for filing all the returns such as 90 days. This will give you the time you need to receive the income documents, file the returns, and the agencies to begin processing them.

A licensed tax professional such as an attorney, CPA or enrolled agent can help by talking to the agencies for you and preparing the returns. But in the end, the agencies should be relieved to hear that you’ll be filing your returns.

June 11, 2008 at 7:03 pm
(5) Mike says:

Thanks for the prompt reply. A follow-up: are there any tax implications for me if I was married during some of the years that I did not file and my spouse earned income?

June 11, 2008 at 7:51 pm
(6) William says:

Mike, you will need to determine if your spouse already filed a separate return, and if so, whether she itemized or took the standard deduction. If she hasn’t filed, then the both of you will need to decide whether to file jointly or separately. If you are no longer together, it will probably be in everyone’s interest to file separately, even if that means a higher tax bill, because then each person will be responsible only for his or her own taxes.

June 14, 2008 at 5:13 pm
(7) Allison says:

Hi Mike,
I’m in Missouri and late filing several years for my BF. FUN! Is there a refund deadline for the state of Mo? Thanks in advance for this and all of your VERY helpful advice.

-Allison

June 14, 2008 at 5:15 pm
(8) Allison says:

So embarassed…
Certainly meant to address the above to William, really I did.

June 16, 2008 at 1:58 pm
(9) William says:

Allison, Missouri has the same refund deadlines as the feds. The relevant law here is the Missouri Revised Statutes section 143-801 which provides for a refund deadline of 3 years from the original filing deadline or 2 years from the date of an overpayment.

August 3, 2008 at 3:03 am
(10) Eric says:

I am in the process of filing a back tax return for 2001. If filed on time I would have received a refund, however I understand that I am now beyond the 3yr deadline.
I have had multiple tax refunds “credited” toward the substitute tax return total due including the withholding of my entire stimulus check. Since I am about to file a return showing that no penalties should have been assessed, will the funds previously withheld as payment toward the inaccurate balance be returned to me?

August 4, 2008 at 8:23 pm
(11) William says:

Eric, Yes. The refunds that were applied to the year in which the IRS assessed additional tax as the result of a substitute tax return will be refunded to you. The only caveat is that the overpayments (in this case applied refunds and stimulus payment) need to have been credited to that year within the past two years. The original 2001 refund would not, however, be refunded because it is beyond the 3-year statute.

August 11, 2008 at 9:34 pm
(12) David says:

Hi William, Similar question to Eric. I had late returns to file from 2000, 2001, 2002, 2003. All the the returns were filed and had refunds due back to me. I understand that I cannot get any refund past the 3 year mark, but they had combined the 2000-2003 penalties and interest and have been keeping my refunds from 2007, 2006 and 2005.

Will the penalties and interest be recalulated and then will I get the past refunds that were held for 2007, 2006 and 2005? I just received my 2nd notice that they could not allow the claim for the 2000 return. This comletes 2 notices from each past year filed. Therefore, how long should I expect a recaluation to take place and when shall I expect any refunds? Do I need to write additional letters to request a recalculation? Thanks for your help.

August 11, 2008 at 10:00 pm
(13) William Perez says:

David, the IRS should recalculate your penalties based on the fact you had refunds instead of balances owed. This will happen generally around the same time that you get your letter saying that your claim for a refund was not allowed due to the statute of limitations.

After the penalties are recalculated, the IRS will then re-apply your refunds. Any net overpayments (that is, if all your taxes are paid off, and there’s still money left over) will be mailed to you. This can easily take up to a couple months extra.

What I do is wait until all those “claim for refund not allowed” letters to arrive. Once I have that letter for all years that were filed, I then call the IRS and get a record of all the account transactions (called an account transcript). This will show taxes owed, payments, penalties, corrected payments, refunds…. in other words all transactions involving money. What you are looking for is to see the overpayments refunded back to you.

This takes some time as there are multiple years involved. So just be patient. If you haven’t received refund checks by the 3rd month, then I’d start calling the IRS to make inquiries.

August 22, 2008 at 10:52 am
(14) CR says:

What’s the longest someone’s had to wait for a back tax return filing to ‘clear’ in order to get the balance of current tax refunds paid? I’m waiting on over $4,000 from this year’s return to be sent and it’s nearly September. I filed my 2002 return in late March; the IRS withheld $4,000 from this year’s refund due to that late filing. By my calculation, that’s 5 months now waiting on the refund and counting…. IRS told me nearly a month ago via phone ‘any day now’.

August 23, 2008 at 9:59 pm
(15) taxes says:

CR, it can certainly take a long time for the IRS to process returns from earlier years. Waits of up to 6 months are not uncommon. Since the IRS has already told you it will be “any day now,” that probably indicates that they can see you filed a return and just need to finish their internal processing so your refund can be released.
If you are still worried, the next time you call the IRS, ask them what day the 2002 return was received, and when the return will post to their system, and how long after that until your 2007 refund can be issued.

August 28, 2008 at 11:55 am
(16) J says:

Can you make any recommendations of professionals that can help me in the Washington DC area?

September 12, 2008 at 8:06 pm
(17) Bridget says:

Thank you for your site. I tried to find some info from the I.R.S. site and tried every word configuration I could think of and got no-where, it took me about 20 seconds here.

September 15, 2008 at 11:17 am
(18) Thomas says:

I have been a non-filer for 5 years, due mainly to some health issues I had, and inability to pay. I know I should have just filed, but after the first year, went to the 2nd year, etc. I now want to get this straight, so I don’t face legal action. But, if the tax is too much to pay, even on an installment plan, what happens then?

September 29, 2008 at 8:25 pm
(19) Ike says:

Your site sure is helpful. My question is that the IRS garnished my Social Security based on a substitute tax return the IRS prepared for 1994. I have now filed the 1994 1040 showing no tax due and the IRS has agreed. However, now they want to keep the involuntary SS deduction that is over three years old. Do I have any recourse?

September 29, 2008 at 9:13 pm
(20) taxes says:

Ike, the garnished Social Security benefits can be refunded only in the following two situations: the tax return is an open year under the 3-year statute of limitations for refunds, or the garnishment happened within the last two years. Tax year 1994 is closed for receiving refunds under the 3-year statute. Any payments made in the previous two years, including garnishments, could be refunded. Any payments are older than two years are no longer refundable, however.

October 6, 2008 at 12:43 am
(21) Erin says:

William, I am trying to help my dad file his back taxes. I think it’s been since he and my mom divorced (8-10 years).
Here’s some issues I’m having. He’s a small farmer and beef producer (self employed). The reason he doesn’t want to file is because he can’t afford penalties. He has saved his checks/bank statements for all the years, but not receipts. I have read your site and understand that I want to show a refund (It’s possible that he could show a loss on many of the years), but he never paid any self employment taxes. How should I go about this situation. Still contact the IRS for the “payer transcript” for all the years, would he even have those if he he’s self employed?
He needs to do this, he’s almost 60, and I think he thinks he can run from this until he dies, but I don’t think so. He has recently understood the need to have taxes done, as he couldn’t get a land loan at a large bank…would you belive his small town bank still loans him money on his word?? He just went to the big bank looking for a lower interest rate.

Anyway, any advice you can give me would be so greatly appreciated. I really want to get this taken care of as easily, quickly, and inexpensively as possible for him.

October 6, 2008 at 2:26 pm
(22) William Perez says:

Erin, I can sympathize with your dad’s situation. This is something I’ve seen many many times. In fact, I think banks are going to become even more adamant about seeing copies of tax returns to verify income especially in the aftermath of the mortgage crisis and the bailout legislation.

The basic thing to remember is that your dad’s income tax and self-employment tax are both calculated based on his net income from his farming. So the most important thing is to make sure you can tally up both his total income and all his farm-related expenses for this years. The goal is to be as complete and thorough as possible, as this will keep his tax as low as possible, and in turn this will keep his penalties as low as possible.

The other thing to keep in mind: there is a three-year time limit for Social Security credits. These SS credits are used to determine a person’s eligibility for SS retirement and disability benefits. What this means, at a practical level, is for tax years older than 3 years, your dad will be required to pay the SS/Medicare tax (the self employment tax) but he will not earn about SS credits for those older years. So for those older years, my preference is to be as thorough as possible about documenting expenses so as to keep his tax as low as possible. (Since he’ll get no benefit even though he’ll have to pay the tax.)

For years when he has losses, those losses are very valuable. They will offset his other income (interest, wages, dividends, etc.) and any loss in excess of his income can be applied to another tax year (usually: either the 2nd preceding tax year, or the subsequent tax year). This decision is best made by first preparing all the returns he needs to file, and then seeing where the loss can be best utilized in terms of keeping his tax, penalties and interest at a minimum.

What I would do is create a to-do list. I would first start with the income transcript from the IRS. This will show any 1099s and other tax documents filed with the IRS to report his income. I’d then use that as a guideline for digging up additional information about his income and expenses. I would probably focus on getting the more recent years filed, since he will probably have more complete records for those years. And then I’d start working back to see what documentation is available. Sometimes IRS agents are willing to waive the requirement to file really old years, but what’s crucial here is that the IRS agent “closes out” those years by inputting a closing code on their system that indicates the taxpayer has been told they don’t need to file a return. This protects your father from the IRS coming back later and demanding a return. Simply not filing won’t offer the same level of legal protection.

That’s the general plan for working on your father’s tax project. This will take time and patience. He should be working with an experienced tax professional on this project, because there are little things that can really help move the project along faster.

Hope this helps. Let me know if you have any additional questions.

William

December 1, 2008 at 10:55 pm
(23) Eightball says:

How many years does the IRS go back for filing back taxes? i recently visited my local IRS and was told the years going back to the late 90′s were not needed UNLESS the IRS had sent a letter to the tax payer to collect for those years?

December 1, 2008 at 11:54 pm
(24) William Perez says:

There’s a couple of ways to answer this question. Legally, the IRS can demand any unfiled tax return. That’s because the statute of limitations on IRS actions (such as audits and collections) does not start until the tax return is actually filed. If no return is ever filed, the IRS could conceivably force the person to file at any time, even if several years have elapsed.

However, filing for older years is often unfeasible. Documentation such as W-2s, 1099s, bank statements, and receipts have a way of getting deleted, purged, and shredded. So on a practical level, it is often impossible to accurately find records for a return that was due more than ten years ago.

That being said, I’ve seen the tax agencies take different perspectives depending on the case. One time I had a state tax agency demand that the client file her 1985 tax return. Other times, we’ve been able to ask the agencies to overlook a year for which we were no longer able to find W-2s. These sorts of decisions are made on a case by case basis, and it’s best to document the decision made by the tax agency with the agent’s name, badge number, and the date and time of your communication.

December 18, 2008 at 10:34 pm
(25) William Powell says:

William thank you for creatting this site it really helps to understand the way the IRS works but I had a qwestion: the last time I filed my taxes was in 2003 I was hurt on the job in 2007 and awaitting surgery now every sense. Once I have surgery and recieve my seattlment can the IRS collect any past due amount if any.

December 19, 2008 at 2:52 pm
(26) William Perez says:

Mr Powell, it’s hard to say exactly what’s going on in your situation. Do you owe from a tax return filed in 2003 or earlier? Or has the IRS assessed tax for 2004 and later years? If the past due amount is from an assessment, it will generally be advantageous to file the return as that usually results in a lower tax due.

That being said, the IRS can hold off on collecting money from you until you are able to go back to work since disabilities usually fall under the IRS’s guidelines for placing an account into not-collectible status based on financial hardship. You may also qualify for a reduced payment plan that can fit into your monthly budget.

The main thing will be to figure out how you can protect yourself during this time of financial uncertainty and also satisfy the demands of the IRS. It might be helpful to speak with a licensed tax professional to obtain some more specific advice that’s tailored to your particular circumstances.

December 23, 2008 at 10:49 am
(27) V says:

My child’s father has his taxes garnished due to back child support. He has decided not to file for the past 3 years because of this. Is this allowed? His employer (his father) files taxes for him and also deducts 50% of pay prior to taxes. This is not right. Any advice?

V

January 15, 2009 at 1:59 am
(28) maryam Hoffmann says:

Hi, I’m reading this website and really appreciate the time and effort that goes into it. So thank you in advance.

I’m late filing 2005, 2006 and 2007 for a friend of mine who qualifies for EIC, he’s a chronic nonfiler and I’m curious if putting the correct amount EIC on the 1040 form will have any effects on future filing or needs mentioning in future employment situations.

January 15, 2009 at 9:27 pm
(29) William Perez says:

V, I take it to mean that the employer is reporting his wages to the IRS (on Form W-2), as well as deducting taxes for previous years and turning that money over to the IRS. This is what employers are required to do when the IRS garnishes a person’s wages.

At this point, the person will benefit by filing his tax returns. As the amount he owes to the IRS is probably far less than what the IRS thinks he owes. Getting current with his taxes and child support will remove the wage garnishment. The sooner he can get this taken care of, the sooner the IRS will allow the garnishment to stop.

January 15, 2009 at 9:31 pm
(30) William Perez says:

Maryam, Thanks for the compliment; I really appreciate it. The earned income credit usually will not impact future tax returns. And employers shouldn’t be ask about a person’s tax situation, as that information is supposed to be strictly confidential.

January 21, 2009 at 1:16 pm
(31) sis says:

what is the average cost of filing w-2 forms for a couple that must file injured spouse and can we go back to 2005 and will we get the refund

January 21, 2009 at 4:47 pm
(32) Anastasia says:

Hey William, my brother has decided to file taxes for the first time. He’s been working for about 8 years and is hired on under contract labor. He has had to take out taxes himself, which obviously he hasn’t. He is thinking of just filing for this year and then seeing what happens. Is it best for him to file all of them at once, even if he can’t find all of the information? Is there a specific process he’ll have to go through because of the contract labor?

January 21, 2009 at 8:50 pm
(33) William Perez says:

Sis, every accountant charges differently, but the average price for a straightforward tax return like yours should be around $150 more or less. Refunds from the year 2005 expire on April 15, 2009 (three years after the filing deadline). So I’d file your 2005 return as soon as possible to protect your refund.

January 21, 2009 at 8:55 pm
(34) William Perez says:

Anastasia, contractors get to deduct any expenses they incurred, and this can help keep his taxes lower. He should try to dig up all the expenses he can. Also, he’ll have two different taxes applied to his earnings: the regular income tax and a self-employment tax of 15.3% to cover Social Security and Medicare. I’d recommend that he talk to an experienced tax accountant for more specific advice on how to proceed as there may be several issues to address, such as whether the IRS has assessed tax for the years in which he hasn’t filed.

May 3, 2011 at 10:31 am
(35) casey says:

hello, you seem to be the most informative person i’ve come across reading. my husband didnt file 2004-2007 taxes he may owe for 2007 but not for any of the other years, while i realize its too late to get any of the other refunds back, is it possible that they would credit that towards him owing for 2007? we had a 5000 dollar refund for 2009 and they’re holding it now until we file the past taxes. they didnt say anything in 08 or 10 but when we got a larger refund for 09 (that we filed in 10) they nailed us and I’m pulling my hair out trying to fix this. Also we were not married in any of those years we married in 08.

January 21, 2009 at 10:30 pm
(36) jean says:

I have a question. I have a family emergency last year around tax due time 4/15/2008. I filed a extension and went oversea. After I return, I forgot it and finally file the tax and mail it out on 12/17/2008. I should get a refund for it, but has not shown up in my bank account yet. I have not received any mail back yet either. The tax return address for late filing is confused and I don’t know if I sent to the right PO BOX number? How can I check the status of my tax return for 2008?
How long should it take to get my last year’s refund back, both state and federal.

Thanks!!

January 22, 2009 at 12:57 pm
(37) taxes says:

Jean, the IRS takes longer to process late-filed returns. I would expect your refund to show up in approximately 12 to 16 weeks from the date you mailed it off. One thing you can do is call the IRS at 1-800-829-1040 and ask them if they have received your tax return and if they have any idea how long it will take to get your refund.

January 29, 2009 at 5:06 pm
(38) charlotte says:

I need to file my back taxes for 07-08, I have all of the forms filled out from both years but I just didnt have the money to pay them until now. Can I just send my check with the old forms or do I need to fill out all new ones?

February 2, 2009 at 3:14 pm
(39) Pat says:

I had taxes from 2001 but last year I got my new Social security can I make the taxes and get a refund? or not

February 5, 2009 at 2:16 am
(40) Jane says:

hello,
I just helped my mother file her back taxes for 2005 and 2006. Am I to understand that this is in the 3 year period and that she should get her full refunds without any penalties? They also garnished her wages last year for the ‘assumed’ amount that she owed for her 2005 taxes but the 2005 tax that I just filed for her showed she gets a 1245 dollar refund. Will she get that refund as well as all of the money garnished from her wages last year?

February 10, 2009 at 1:58 am
(41) Sandy says:

Thanks for all of the helpful information William!

My first question was answered by you in a previous post ~ to file the most recent of past year returns first to protect the refund.

My follow-up question would be… should I anticipate an actual refund? or will the IRS hold on to it until the prior years’ (older than 3 yr.) returns are filed?

TIA

February 10, 2009 at 2:26 am
(42) Sandy says:

Another question. My husband and I lost about 40K dollars to a Ponzi scheme. Can this be filed under the Casualty Theft/Lost deductions?

Please say yes..

Thanks again!

February 10, 2009 at 7:21 pm
(43) Ken says:

A relative has worked odd jobs for cash for the last 11 years. This person has not filed at all in this time period. The person has finally come to realize the risk of severe financial and legal repercussion. What is the best way to proceed to square up with the IRS? The person has never received any notice of owing the IRS but they would like to get the monkey off their back. Would the affected party be arrested if they do contact the IRS? Is their any way to avoid arrest? Due to the cash and personal check payments(approx 10K-25k a year)the person has little record of any finances beyond the past few years and even these are sketchy. How would they go about figuring a taxable income total? This person is also concerned with possibly implicating the persons responsible for paying them in the form of personal checks. Any insight to this mess would be greatly appreciated.

February 23, 2009 at 4:41 pm
(44) matt says:

i have not filed my 2004 taxes yet and owe about $100. i received a stimulus check for less than the $600 advertised by the irs. does this mean that the irs has taken out the tax and penalties i owed from 2004? i received my w2 forms a couple of years late due to a move is there any recourse to lessen penalties as a result of this happening?

February 23, 2009 at 10:47 pm
(45) taxes says:

Ken, this is an excellent question. It’s best discussed with an experienced tax professional, as there are several different factors to consider here. Broadly speaking, the IRS is rarely interested in sending someone to jail (well, unless you’re a movie star or politician or criminal and they want to make a huge point with the media). So I would not worry too much about jail and instead worry more about how to go about actually reporting the income. It’s better to file an accurate return than an inaccurate one. And so my concern here is that with incomplete records, your relative might actually end up reporting too much income and thus overpay in taxes and penalties.

February 23, 2009 at 10:02 pm
(46) taxes says:

Charlotte, as long as the tax forms you already filled out are complete and correct, you don’t need to fill out new ones. Just mail them in to the IRS and send along your check.

One tip: do send the two years in two separate envelopes. Otherwise the IRS just gets confused and might process the returns incorrectly.

And for future reference. If you get in this situation again (where you are ready to file but cannot afford to pay right away), then I suggest filing the returns and setting up a payment plan. The penalties will be much lower if you file on time.

February 23, 2009 at 10:05 pm
(47) taxes says:

Pat, Sorry, but I’m not sure I really understand your question. If you need to file your 2001 tax return, then you’ll need to report only the income and deductions you had in that year. If you recently received a lump sum payment from Social Security for the year 2001, that payment will be income in the year you actually receive payment.

February 23, 2009 at 10:14 pm
(48) taxes says:

Jane, you are absolutely right. As of right now (early 2009), your mom is eligible for refunds from the years 2005, 2006, 2007, and 2008. Here’s how the 3-year refund statute works. It’s three years from the original filing deadline. The ’05 return was due on April 15, 2006, so you have until April 15, 2009 (three years later) to file and still get a refund.

The amounts levied from her wages are also refundable. There’s a separate 2 year statute of limitations for overpayments of tax (such as levies, garnishments, and after the fact payments). So if all the garnishments happened last year (2008), then those are fully refundable.

The IRS should issue her a refund for the full amount that has been paid in, but it may take awhile, and they might move her refund money from one year to another temporarily. For example, if they work on 2005 first, then may move some of her refund money to 2006 if their assessment shows a balance due.

In the end though she should get back all of this money. Just keep track and review the notices that come in from the IRS showing how her refund amounts have been calculated.

February 23, 2009 at 10:35 pm
(49) taxes says:

Sandy, it’s always a good idea to file the more recent returns as soon as possible to protect the refunds. Now, for the older years, here’s what could possibly happen. If the IRS has assessed balances on those years (that is, the IRS thinks you owe for those older years), then the IRS will move your refunds from the more recent years to the older years. The IRS will likely move them to the oldest year first. In this scenario, you’d then need to file for the older years to show any tax due or refund. Once those years are filed, the IRS will keep moving the money around to any years you owe, and refund you the difference.

I hope that makes sense. But let me rephrase things another way just in case. The accounting for balance due or refund will happen for each tax year. If there’s any refunds, the IRS will check to see if they can be released. And if so, they will then check to see if the refunds need to be moved to another year to cover a balance due. They’ll keep doing this checking until all the years are processed. If a recent refund is applied to an older year, that refund is still refundable to you if that older year doesn’t really have a balance due.

As for Ponzi schemes, there’s no specific deduction for them. If the scheme was represented to you as an investment, you might be able to report this as a capital loss. Alternatively, you might be able to report this as a Theft Loss Deduction (which can be mathematically more advantageous than the capital loss anyways).

February 23, 2009 at 10:52 pm
(50) taxes says:

Matt, It is possible that the IRS took part of your stimulus payment to pay taxes from an earlier year, or to pay child support or student loans. If that happened, the IRS should have notified you of where they sent that money. In any event, I would try to file your 2004 taxes, as your calculation of how much you owe is probably less than the IRS’s guess of how much you owe.

Generally, the IRS will waive penalties only for reasonable cause, and the IRS has taken the position that reasonable cause for not filing means that the individual was incapacitated in some way (that is was physically or medically unable to file). So penalty waivers are usually pretty hard to get approved.

February 24, 2009 at 1:46 pm
(51) sherry says:

If i have a 2005 w-2 to file do i need to use a 2005 tax program to do this or can i file on the irs main site? what do i do?

March 7, 2009 at 6:02 pm
(52) sandi says:

I have a question about filing back tax on my parents who are both deceased (and had not filed taxes for a long time) can we file on their behalf? Would we be eligable to obtain the refund since they both are deceased and where do we find copies of their statements W-2 etc. to file

March 9, 2009 at 4:50 pm
(53) Daniel says:

Hello. Thank you for this very useful article. I have a question that hopefully you can answer. I never filed my 1999 taxes. I do have my documents (W2′s) and I’m sure I would have received a refund (I have every single year). I’ve been thinking about filing and thought I’d do it myself. Would that be ok or do I need to go through an accountant? Also, say I don’t file my 1999 taxes and end up owing the government a lot of Taxes this year (took a distribution on a retirement account – TERRIBLE very bad idea, i now realize)… would I be able to set up some sort of payment plan to spread my payments over time? Thank you!!!

March 9, 2009 at 4:57 pm
(54) William Perez says:

Sherry, you’ll need to use a software software program from 2005, or download the 2005 tax forms direct from the IRS Web site. Both software and forms are specific to each year since tax rates, deductions, and other information changes year from year.

March 9, 2009 at 5:00 pm
(55) William Perez says:

Sandi, if their estate is going through probate, the executor of the estate will need to file returns for them. If there’s no probate, you’ll probably be able to file on behalf of your parents as their personal representative. You can obtain copies of their W2s by calling the IRS or mailing in Form 4506-T. See my article on how to dig up missing tax documents for details on how to go about doing this. And there’s additional tips in my article on deceased tax payers.

March 9, 2009 at 5:04 pm
(56) William Perez says:

Daniel, I think you’ll be fine filing by yourself. Just download the forms from 1999 from the IRS web site. If your only income was wages and don’t have a lot of deductions, you’ll probably be just fine with a 1040-EZ or 1040-A form. If you have a refund from 1999, that refund is no longer refundable as you have three years to claim any refund money. And that refund money cannot be applied against what you owe in a different year.

It’s likely that the IRS could set up a payment plan even if you don’t file for 1999. In order to make that happen you need to ask the IRS agent to close out the 1999 tax year. However you might was well file for that year so that the IRS will be absolutely sure you don’t owe.

March 11, 2009 at 1:03 am
(57) kris says:

I need to file state taxes for 2001. Actually, I didn’t know how to go about it recieved copies of my return from irs but no state information was on them, and Indiana made me pay the largest sum possible for this year..around $500. Now I was wondering is there any possible way to still obtain this information and file an ammendment?

March 15, 2009 at 7:56 pm
(58) Kelvin says:

How do I find out what years I didnt file my taxes? i know of the last two but cant remember if i didnt file beyond that! Help!

March 26, 2009 at 4:09 pm
(59) Tammy says:

Hello William,

I had a small business from September 2005 to August 2006. When the business was formed it was supposed to be a partnership but ended up being just me. In 2008 I had my taxes filed for the previous years. 2007 was filed first. My 2005 and 2006 business taxes for partnership were sent in as zeros explaining that it was a sole proprietorship instead and my personal taxes were then filed for 2005 and 2006. In 2005 I had no income and received no refund. I was employed in the end of 2006 and so I received a refund offseting my net loss. I sent in my amended 2007 return in September, and had to send in more paperwork in January of 2008. But today I received a bill in the mail from the IRS for interest and penalties accumlated for my 2006 taxes. It had the business address listed previously and it was returned to them, then they sent it to my home address which has been on all of my returns. I have not received my refund for my amended 2007 return. Can you please explain what my options are? I was under the impression that I wouldn’t owe for an interest or penalties

April 4, 2009 at 7:40 pm
(60) David says:

William, I just wanted to finally follow up on a previous post. I can happily say that it took about 8 months to get a check for back year’s taxes filed. I had to file 4 years in all. I received a big check which was bigger than I thought and 2 weeks later I received another check for around the same amount. Was I pleasantly surprised. Needless to say once it was in my hand, I wasn’t going to question it. Some advice I may offer is to call the IRS and ask where to mail each return as every year may have a different address to send to. This should help speed things up alittle. Thanks again and good luck to all.

April 6, 2009 at 6:54 pm
(61) William Perez says:

David, thanks for the follow up. Those are some good tips.

April 10, 2009 at 12:51 pm
(62) Anthony says:

I’m really concerned and nervous about my situation. I haven’t filed taxes in 8 years. I want to clear up the matter, but because of the fear of the consequences and my inability to pay what’s owed coupled with the penalties I haven’t filed. Will the IRS be willing to work out a payment plan with me? And what consequences might I expect?

April 11, 2009 at 12:13 am
(63) pam says:

I just filed 2004,05,06,07, and 2008. I have over $3500 coming back for 08 and would have had about $200 from 04. 05 thur 07 I had to pay the highest amount being about $400 which I sent a check for each year indivually. The others were only about $100. Will the IRS keep some of my money from last years refund for the interest due? Will I be in any trouble? The IRS never contacted me during any of this period.

April 13, 2009 at 8:47 am
(64) Michelle says:

Good morning: I am filing an extension, and do not know if my husband and I will be filing together or separately for 2008. Does it matter if I file an extension in both our names then file married filing separately? Thanks in advance for your help.

April 20, 2009 at 3:56 pm
(65) Jenn says:

My sister in law confided in me that she got a letter from the IRS for not filing for taxes. She has always left the finaced and bill paying up to her husband who is my brother. She didn’t know why his name was not on the any of the paperwork. Do you think he filed his own and left her in the wind? Is there a way to find out. I’m sure she won’t get a straight answer out of him, and yes, they are still together and I’m not sure how long it has been since her’s was filed. Any advice would be welcome. Thank you!

May 2, 2009 at 12:59 pm
(66) Bridget T says:

Help..I let someone claim my kids because I owed student loan and was in active alcoholism I am now sober and want to take care of my taxes can I go back and claim them since it was illegal for them to claim them?

May 13, 2009 at 9:42 am
(67) Chris says:

So if i’m understanding correctley 2002 and 2003 tax returns cannot get any refunds because they are past the 3yr mark?
Thanks, Chris

May 13, 2009 at 7:28 pm
(68) William Perez says:

Anthony, yes the IRS is generally willing to set up a payment plan. The important thing is to file first, because the IRS won’t be able to set up an installment agreement until after all the tax returns have been processed.

May 13, 2009 at 7:30 pm
(69) William Perez says:

Pam, the IRS will likely hold on to your refunds to cover any penalties and interest on the years for which you had balances due. After those penalties are paid off, the IRS will send the remainder of the refunds to you.

May 13, 2009 at 7:38 pm
(70) William Perez says:

Michelle, that’s a good question. A jointly filed extension should still be valid even if you decide to file separately.

May 13, 2009 at 7:51 pm
(71) William Perez says:

Jenn, there’s a couple of things I can think of. I did see a situation one time where the IRS thought the wife didn’t file a return. It turned out that she filed jointly with her husband. We asked the IRS to verify whether a joint return had been filed, and once they confirmed that, they marked her account as being filed for those years. So that’s one possibility. The other possibility, as you mentioned, is that the husband has been filing separately. In that case she should file her own, separate return for the years she needs to file. She may also want to consult with an experienced tax professional to review the IRS letters and provide any other advice.

May 13, 2009 at 7:54 pm
(72) William Perez says:

Bridget T., while you were legally eligible to claim your kids as dependents, if you go back and correct your tax returns, you’ll get the other person in trouble with the IRS. He or she will not only have to pay back the tax, but the IRS will also add penalties and interest.

May 24, 2009 at 11:11 pm
(73) Matt Slezak says:

Hi, my brother has his own construction business and he has not filed his taxes since 2001. He business is not very successful and he is worried about fines, penelties, etc. He also doesn’t know where to start since his office was flooded last year and he pretty much lost everything regarding finances. where is a good point he can start.Obviously he can’t just file a 1040EZ…or can he??

May 25, 2009 at 5:22 pm
(74) William Perez says:

Matt, what form(s) your dad will need to file is determined by the type of income and deductions he has, so it’s hard to make a general statement. In addition to his personal 1040 (or a shorter form), he will also need to file business returns. Which form applies depends on how his business is structured (as a corporation, partnership, or a sole proprietorship). The thing he should worry about first is making sure he has a complete set of financial documents as possible. For example, he may need to order bank statements, credit card statements, and so forth in order to accurately determine the income and expenses of his business.

Consulting with a licensed tax professional can help. In particular, the tax person might be able to give your dad advice on where to look for financial data, what types of documents to gather, and then liasion with the IRS and state agency to prevent any aggressive actions they might be planning.

May 26, 2009 at 1:25 am
(75) sugar says:

I have moved alot over the last 5 years, and never received any W-2′s from my previous employers. I have never made more than 20,000/year, and have no investments/properties/assets. I was under the impression that because I have made less than 25,000/year that I probably won’t owe the IRS any money. Is this an accurate assumption? I intend to take care of this as soon as I can afford a tax professional’s assistance, but wanted to see if anyone could advise on what to expect. Thanks!

June 1, 2009 at 12:47 am
(76) Pam says:

Thank you for answering my previous question. I have received my refund and taxes are all caught up. Now I’m wondering. Will I get a stimulas check for 2007 since all my taxes are paid and up to date? If so do I have to call the IRS and ask them for it?

June 2, 2009 at 11:36 am
(77) Roman says:

I didn’t do taxes for 02, 03, 04, 05, 06, 07 and I got levy on wages, salary on me. What should I do? Thank you !

June 2, 2009 at 4:22 pm
(78) William Perez says:

Sugar, whether you’ll owe tax or not depends on how much taxes were withheld from your paychecks, and how much your tax liability is to the government. If you’ve overpaid your tax, then you won’t owe. If the withholding don’t cover the tax, then you’ll owe. There’s really no way for me to make an assumption one way or the other, except to say that in the cases I see, most people have refunds.

One quick way to see if you might owe or not is to run a quick tax calculation and compare it against your withholding. For 2008, assuming you are unmarried and have no dependents, the federal tax would be 1,260. Compare this to your withholding for 2008 to see if you might be over or under this amount. Of course, this is a quick gauge only. Your actual tax situation will be different than this.

June 2, 2009 at 4:31 pm
(79) William Perez says:

Pam, the stimulus payment should be included in your 2008 refund amount. If you didn’t calculate that on your 2008 tax return, then the IRS will send you a letter calculating the amount for you, and send you any remaining refunds. Your refunds may have been moved around to other years to cover any expected balances. Carefully review any letters from the IRS to be sure that the refunds went to the right places.

June 2, 2009 at 4:36 pm
(80) William Perez says:

Roman, you should first file your tax returns. The IRS won’t remove a levy until the tax returns have been filed. Once the returns are filed, you will then be eligible to set up a payment plan (aka an installment agreement) for any balances that you owe. Once that payment plan is set up, the levy on your wages will be removed. All of this takes some time. If the levy is particularly harsh, you might be able to ask the IRS to remove the levy based on financial hardship. However the IRS will likely ask for a monthly budget, paystubs, and bank statements to verify that you qualify for this provision.

June 2, 2009 at 4:52 pm
(81) Minister P' says:

Thanks for the much valuable info on this site. I have a situation where I haven’t filed taxes since 1999! I was self-employed making about 30-40K, this went on til’ the end of 2007 and since then I have not worked. I becane a minister and receive a small monthly stipend. Should I be able to handle this myself and my CPA? or should I contact a “Tax Helpers” agency? My biggest fear is I’ll spend the rest of my life paying this off. Is it conceivable to think that I might of had a refund most of those years, because of dependents, and I might not owe the IRS that much? Thank you for your response.

June 4, 2009 at 9:31 pm
(82) William Perez says:

Minister P., there’s a couple of things you can do. First, you’ll need to file any returns that haven’t been filed. That’s because the IRS refuses to set up payment arrangements unless all returns are filed. You may be eligible for any number of programs to help you pay the tax more affordably. You might be able to file the returns yourself, just download the tax forms from the tax forms archive at the IRS Web site. Since you were self-employed, you’ll need at minimum the Form 1040, Schedule C, and Schedule SE.

For your ministry income, you might look into whether you are eligible to be exempt from self-employment taxes.

While you (or your accountant) are working on the forms, you’ll want to the IRS to defer any attempts to collect taxes. Typically I ask for a 60-day hold, but sometimes the IRS will grant only 30 days or two weeks. The idea here is you need enough time free from the threat of imminent action by the IRS to focus on getting your tax returns done.

Next, you’ll want to review all the options for dealing with the tax payments. There’s five different ways to go about handling this. The key is taking a sober look at your current budget. (There’s a handy budget worksheet available here on About.com.) The idea is to take an honest look at how much you can really afford to pay the IRS each month. Once you have an idea about that, you can evaluate the various payment options. If it looks like you can pay this off within five years, your best bet will be an installment agreement. If you won’t be able to pay this off in five years, then I’d consider the partial installment agreement or the currently not collectible program. If you cannot pay off the taxes in five years but you do have some month for a lump sum payment, then I’d take a look at the offer in compromise program.

Most tax professionals should be competent enough to help you handle this situation, but some accountants are more experienced than others in these matters. So ask your friends or family for referrals. You’ll be in a better position to ask for advice and to gauge the quality of answers you are receiving by being informed about the choices available to you and knowing what the process looks like, and having a good idea of what you think the outcome might look like. Some of the ‘tax helper’ firms I see advertised on the internet want to focus exclusively on the offer in compromise, but in my experience that program is usually not the right solution for many people.

Hope these tips help.

June 7, 2009 at 4:39 pm
(83) valerie says:

Hi,I just recently filed my 2006 taxes in late April. I am due a refund. I checked off the box for direct deposit, will they still send a check in the mail? Whats the estimate wait time before im issued a refund? TIA

June 8, 2009 at 12:40 pm
(84) William Perez says:

Valerie, the IRS does not send out refunds for prior years using direct deposit. So they will mail you a check instead. The standard processing times for prior year is 8 to 12 weeks, but I’ve seen processing times of 16 weeks or more during particularly busy periods. If you haven’t received your refund check in the mail in say 10 weeks, then call the IRS at 1-800-829-1040 to find out the status of your tax return.

June 15, 2009 at 5:58 pm
(85) William Perez says:

Pam, you are welcome. The stimulus payment should be claimed on your 2008 tax return as an additional credit. If you didn’t already claim that on your 2008 return, the IRS will likely calculate the credit for you and send you a refund. If you haven’t received a letter to that effect from the IRS, then you could amend your 2008 return to claim what’s being called the recovery rebate credit.

June 19, 2009 at 9:51 pm
(86) Nya says:

I am writing for my mother. She is 59 years old and have not filed taxes in about 12-15 years. For the last 12 she has been on medical for a work related injury and currently receives disability and pension. How should she begin to fix this? The IRS has sent numerous letters. Thanks in advance.

June 19, 2009 at 10:26 pm
(87) William Perez says:

Nya, your mom should consult with an experienced tax professional. You might want to go with her too, to make all her questions are answered. Basically, she will need to file. But usually there’s withholding on medical leave of absence payments. Some of her disability and pension benefits may even be non-taxable. In other words, I cannot really imagine her owing a lot of money. If anything she might have refunds. Of course, the real answer comes from looking at her documents and crunching the numbers. But this is what I suspect so far. The tax professional should help her gather all her relevant documents, prepare the returns, and develop a strategy for paying any taxes owed (if any), and develop a strategy for responding to the IRS’s letters. Hope this helps.

July 1, 2009 at 9:24 pm
(88) Corey says:

What if I filed wrong and received a lesser amount than an actual refund amount? How can I check back on past taxes. I had a friend recently who got back a refund for their 2003 tax after rechecking it.

July 13, 2009 at 4:07 pm
(89) Roy says:

So if i can’t get a refund because it’s been over 3 years– Then why do i owe anything? or if i ever owe anything and wait 3 years and tell them SORRY it’s been over 3 years!!!FAIR IS FAIR!!! Why do they think they can keep anyone’s refund? BASTERds

July 17, 2009 at 1:04 pm
(90) santiago says:

Hello,

I am a dual US/Spainsh citizen, born and raised in Spain. I worked (as an intern) in the US in 1999 for six months, after completing my university studies. But that was it. I came back to Spain and have never filed taxes ever since.

Talking to a US citizen I recently met in Madrid, he informed me that, to his knowledge, I should’ve been filing taxes all along. Furthermore, I started working as an independent contractor (self employed) a couple of years ago, and from what I’ve been researching, that would entail further tax-obligations.

My salary has never exceeded 60,000 USD (I believe that’s below the tax-credit limit).

Therefore, I would appreciate any information you could provide as to where I stand now, from a legal point of view. I’m starting the process to straighten things up, but am a bit uneasy about the subject.

Thank you, and best regards,

Santiago

July 17, 2009 at 5:43 pm
(91) William Perez says:

Santiago, the US taxes its citizens on their worldwide income. However foreign wages are excluded from US taxes under the foreign earned income exclusion, up to $91,400 per year. (The dollar amount changes every year.) Thus you may not have any US tax liabilities, but you may want to file tax returns anyway just as a protective measure. There’s also a totalization agreement between the US and Spain for Social Security coverage, and this may provide you with an exemption from paying self-employment taxes in the US on your Spanish income. You may want to consult with a US tax accountant to make sure of any other provisions that may apply, such as any provisions in the US-Spain tax treaty.

July 29, 2009 at 1:44 am
(92) Yvette says:

My boyfried who moved to California in the middle of 2005 from Oklahoma, just told me he’s never filed taxes since he made the move!!! I’m terrified and would like to help him file his taxes. His biggest problem is not knowing how to claim a house he owns in Oklahoma nor he knows if he should report income on the savings he brought with him which helped him survive for the first four months he was unemployed. PLEASE HELP?!

August 1, 2009 at 11:43 am
(93) Rick says:

My sis and I purchased a home for our mom in 2006. Only my sister is on the mortgage acct. but we have been splitting the interest ded’t. since ’06 on our taxes. I was just audited this year. Will the IRS allow this deduction or should I run for the hills? I maintain proof of all my expenditures. Thanks

August 3, 2009 at 8:32 pm
(94) William Perez says:

Only the person(s) who actually own the home and who are actually on the mortgage loan are entitled to the deductions. However, when being audited, the IRS will send you a list of questions they want to ask (and see backup documentation for). That questionaire (so to speak) limits the scope of their audit. If the mortgage questions aren’t on the list, then don’t bring it up.

August 3, 2009 at 10:29 pm
(95) Rick says:

Thanks William however the reason for the audit was the mortgage ded’t. that I took and the interest was only reported in my sisters name so they want to see my documentation to support my ded’t. Ever hear of IRS reg. sec. 1.163-1 that states ” a mortgage ded’t. cannot be denied if you are the legal or equitable owner of a property that secures the mortgage ? (IRS vs. Ana Usla 12/16/97)
Same situation as I and the Usla’s won… USTC presidence ?

August 26, 2009 at 6:33 pm
(96) William Perez says:

Rick, you are quite right to refer to the equitable owner section of the Treasury Regulations. I discussed this briefly in a previous blog post. You’ll be able to win the audit if you can prove that your situation mirrors that of the cases you mentioned. There’s an excellent summary of the equitable owner provision over at the TaxAlmanac site.

October 6, 2009 at 4:07 pm
(97) Rooster says:

I lost my job at the end of 2002 and collected unemployment for all 2003. I moved in with family have been living with them ever since. Have depleted my savings and maxed out my credit cards. I started going back to school in 2004 and continued on and off until now. I’ve worked small jobs here and there under the table So I haven’t filed a tax return since 2003. Will I have any problems filing future tax returns if I get a job or start a business?

October 15, 2009 at 7:32 am
(98) Harish says:

Hi

I was working in Maryland on H1b visa and I moved back to my country in 2008 end. I filed my federal return but my W2 got lost and I wasn’t able to file my state return. Can you tell me whether I can file the same now and how penalities would be calculated on the same.
Is this a big blunder which one should never do or is ok..

October 18, 2009 at 12:25 pm
(99) Sue says:

Hi – My brother was taken to court for an outstanding debt and one of the conditions of his settlement is that his tax refunds are garnished. Now he has admitted to me that he hasn’t filed MI state returns in 13 years, and he’s panicking. He can’t afford any tax assistance and even though he wants to clear this up, I suspect he won’t follow through. I can try to walk him through the past filing process, but I’m wondering if he should just file his state tax for 2009 and see what happens. He’s worked for the same company for 14 years, and has always gotten refunds from federal (via EZ forms). Thoughts?

October 24, 2009 at 11:32 am
(100) Magoo says:

Hello William,
I have been living in Switzerland for the past 9 years (wife is Italian/Swiss so we decided to live here) and have not filed US taxes since I moved here. I have already sent an email to a local “tax helper” who does US taxes. Besides that I understand I won’t have too much to worry about (hopefully). I only recently learned from an american colleague that I was still obliged to file.
I have a trip planned for December to see my folks in the US. I wonder though if after I have filed how long will it take to get to the Customs agents at the airports and is there a chance I will be arrested? I also recently renewed my passport (which I received after only 9 days)…I think I can assume correctly that the IRS was alerted or not? I am also relatively certain that I will owe nothing or at least very little to the IRS…fingers crossed!

Thank you in advance for taking the time to read/respond!
Magoo

December 8, 2009 at 6:46 pm
(101) Michelle says:

Hi William

My husband and I have not filed state taxes since 1996 I believe. We just received a request for 2008. Do you know what the statute of limitations is in Missouri for the state to enforce back taxes? I just didn’t know if I should start with 1996 or if I should start with a more recent year and work forward.

Thank you

December 8, 2009 at 7:10 pm
(102) William Perez says:

I don’t know the specific statute of limitations for Missouri, Michelle. For federal income taxes, there’s a statute of limitations of three years for refunds and audits and ten years for collecting taxes owed. Many states conform to these federal limitations. Now the statute of limitations does not begin until either a tax return is filed or the tax agency has determined your tax liability and that determination has become final. Generally speaking if a tax return has not been filed, the statute of limitations has not started. However each case is unique and your circumstances might be different than the general case. In particular, I’m thinking of the filing requirement rule. You might not have had a requirement to file a return if your income was lower than the combination of your standard deduction and personal exemption. In that particular case, the IRS (and presumably the state also) would see that you don’t have a filing requirement and thus not contact you about any late filings. Accordingly, I would start with 2008, as that’s the immediate concern. File ’08 federal and Missouri. And of course for ’09 as well just to be ahead of the game. And then see if you might need to file returns for any prior years.

January 11, 2010 at 10:08 am
(103) Chris says:

William I was wondering if I could file a w2 from last year that I recieved after I had already filed. I guess my question is, can I file it with this years taxes and not be penalized?

January 27, 2010 at 6:32 pm
(104) David says:

Hello William. I worked for two places in 2009. was laid off at the beginning of january at one and only worked one month at the other before moving away. Do I really need to file those taxes? seems like such a short time to be at one place to even bother with file the taxes. I also recieved 2 unemployment checks inbetween jobs, will I need to pay taxes on that?

February 16, 2010 at 10:47 pm
(105) Gene says:

Hello William,
I just sent off my 07, 08, and 09 taxes. I sent them all in one envelope together figuring that would be the best way. I then, after the fact, found this page. Will all the years get processed at the same time? Did I make a mistake by doing so? If I did what are my options to rectify it?

February 26, 2010 at 10:22 pm
(106) SMK says:

WILLIAM….HELP!!!! I am trying to help my brother figure this mess out! He is 39 and in all his years of working has only filed 2 times. He is now wanting to get straight with IRS. Would it be best for a professional to help sort this out (if so what type of agency; CPA, tax atty, etc…) or is this something we can face? He is worried that if he were to request a payer transcript the IRS would garnish his wages? Where to start?? Thank You for your time.

March 5, 2010 at 2:26 pm
(107) Anyo says:

Dear William,
I am trying to help my friend file for 2007 an 2008 taxes…Our we supposed to use the 2007 an 2008 tax forms an booklets to file for those yrs?

Thanks in Advance

March 5, 2010 at 2:38 pm
(108) Anyo says:

Oh an also do these rules in your article apply to state taxes as well?

Thanks again

March 12, 2010 at 8:31 pm
(109) jag says:

I would like know your reply to comment 105– i have a samilar situation;HELP

March 15, 2010 at 6:14 pm
(110) allison says:

I’m filing 99-2008 returns for a friend. Can you still claim EIC for years prior to 2006? the result is still tax due not a refund.

March 18, 2010 at 1:56 pm
(111) Kenny says:

I am 32 and I have never filed my taxes. I know I’m in alot of trouble. What is the first step I need to take.the reason I have not filed is a sever mental illness. Thanks for your help.

March 25, 2010 at 10:40 am
(112) Lacey says:

I recently filed my 2008 & 2009 tax returns. I just got a refund check for 2008 and it says 12/08 Void after One year. I just received the check in the mail a couple weeks ago. Does this mean that I cannot get my refund? After reading your information, it sounds like I have three years to receive my refund? I’m confused. Can I cash this check or not?

March 29, 2010 at 3:41 pm
(113) CHARLES says:

IF THE IRS FILED A SUBSTITUTE RETURN FOR ME FILED IN 2005….FOR THE YEAR 2002 AND THE INCOME LEVEL WAS MUCH TOO LOW, CAN I ACCEPT THIS RETURN AS IS? MY IRS ACCOUNT TRANSCRIPT DATED 3/10 DOES NOT SHOW 1099′S FOR THIS INCOME IN 2002. IS THERE ANY FEAR OF THIS EVER COMING UP, OR IF I ACCEPT THE SUBSTITUTE RETURN FILED IN 2005, AM I PAST THE STATUTE OF LIMITATIONS FOR AUDIT?

March 31, 2010 at 12:42 am
(114) Billy says:

I have not filled for 15 years! But I owed for 1993,94 & 95 around $5000 can they still collect that money? I’ve read theres a 10 year limit for them to collect it. Also from 95 to 2004 due to a bad drug habbit… I had no income, no jobs at all so there are no W2s or 1099s how does the irs handle this?

April 2, 2010 at 9:37 am
(115) mshe11 says:

I WISH I WOULD HAVE READ THIS ONE YEAR AGO!! I’VE BEEN HELPING MY BOYFRIEND COMPLETE HIS BACK TAXES THAT HAVEN’T BEEN FILED SINCE 2001! EVERY YEAR HE HAD SOME CRAZY EVENT, BEGINNING IN ’01, HE SOLD AND BUILT A HOUSE, ’02 SOLD STOCK, ’03 WAS UNEMPLOYMENT AND FILED FOR BENEFITS, ’04 BANKRUPTCY, ’05 SEPARATION, ’06 NO INCOME TO REPORT AND THE CANCELLATION OF DEBT FOR BANKRUPTCY, ’07 DIVORCED!! SORRY THAT MAY BE A LITTLE “T.M.I.”, WE HAD AN EX-TAX CHIC HELP COMPLETE ALL THE 1040′S WHICH WAS HELPFUL, BUT SHE BECAME IMPATIENT AND TOLD US TO MAIL EVERYTHING IN AT ONCE!!! MY GUT SAID NO, BUT MAILED ANYWAYS!! JUST AS I SUSPECTED THERE ARE ALL KINDS OF MISTAKES. TWO OF THE YEARS (03 & 04) WERE SUPPOSE TO BE REFUNDS!! I GUESS I NEED TO GET TO MY POINT; SINCE THERE WAS A BANKRUPTCY IN ’04, WOULD THAT BE A REASON TO APPEAL THOSE REFUNDS?

April 6, 2010 at 2:44 am
(116) stacy says:

thank you for your article. It helped me more than you know and it sounds like it helped alot of other people. I wish there were more people out there like you who are willing to help others and share the information you know. THANK YOU so much. God Bless you. Have a wonderful day.

April 19, 2010 at 5:35 pm
(117) Miranda says:

William,

My husband was previously married and divorced in the same year. He also had a child born that year. He claimed both dependents on his W4. He did not file taxes that year for whatever reason. Because he and his ex-wife were already split, how do we find out if she filed and if so if she claimed the child? They are not on speaking terms and his daughter has been legally adopted by her current husband. We just want to file the back taxes so we can be up to date and alright with the IRS. Thanks!

April 28, 2010 at 11:48 pm
(118) Dan says:

Hello,
I have a small business and was relying on my previous book keeper to take care of all of my taxes. She became very unreliable and we ended up parting ways. Come to find out my taxes were not filed since 07 and I am panicing!! She never backed up any info on my computer system so getting financials from my QB is difficult but I do have previous statements ect. I really want to get this taken care of and was wondering who should I look to for help?? A regular CPA or tax attorney?? Please advise. Thank you.

April 29, 2010 at 4:45 pm
(119) William Perez says:

Sorry to hear about your troubles, Dan. If you are able to contact your bookkeeper, be sure to obtain from her all your documents, data, files, and other information that belongs to you. As for the next person you hire, I would recommend either an enrolled agent or certified public accountant — these are licensed professionals and generally cheaper than attorneys. The EA or CPA can then sub-contract to a bookkeeper (or do the bookkeeping themselves). This way the bookkeeper will have two people monitoring their work. Since you have statements printed out, you may be able to file tax returns using those statements. The important thing to remember is to make sure the tax returns are accurate — there’s no use in rushing just for the sake of filing.

May 11, 2010 at 11:15 pm
(120) Kat B says:

Wow I’m blown away trying to read through all of this information! I have a question (or ten) about not filing and I’m sure your heads will hurt after reading this long novel. I know everyone’s situation is unique but similar, however I haven’t run into anyone with my particular situation.

In late 2001 my son went to live with his father (whom I have been divorced from since 1996). Up until that point (late 2001), I had full custody and had filed my taxes like a responsible citizen, claiming my son each year as I was legally allowed to do. When my son went to live with his father, he started claiming him on his taxes even though I was fully supporting my son for the majority of the year 2001. I don’t believe our parenting agreement spelled out WHO would get to claim our son, it was just a verbal rule between us that I was always the one to claim him since I had full custody and his father didn’t support him aside from minimal required child support. After he went to live with his father, we made another verbal agreement that we would share claiming him each year, since I was single, made less than $22k a year and he was remarried with a good dual income-THIS NEVER ACTUALLY CAME TO BE. (i know my fault for not getting this in writing)

This created a problem for the both of us because my ex husband decided to claim him for 2001 as did I. Long story short on that episode-he was penalized and had to pay back whatever refund he was paid for claiming him for 2001 since it was proven that I was the sole supporter of my son for the majority of 2001.

2002 taxes roll around and I file and claim my son-because yet again another agreement was made only he didn t hold up his end of the deal and claimed him as well and I am the one who ends up owing but I can’t pay, it’s around $2k because I took the EIC like I always had —-all the while I am still single, still making low yearly wages, in addition to paying child support and additionally supporting my son as far as clothing, school supplies, food, etc went.

2003 and I was diagnosed with several autoimmune diseases making my financial situation even more strained. I don’t file because I know I can’t pay what I owe, and I am still trying to survive on a single low paying income and pay child support and support my son in addition to the child support. This is also the last year I can recall receiving any correspondence from the IRS about my tax situation, after trying to make an offer of compromise, and payment arrangements that were declined, I never heard another word from them.

2004, 2005, 2006 I don’t file. It actually has hurt my brain trying to recall that far back if I had actually filed them or not and I finally determined that I did not file.

2007 I get married, my new husband files his taxes, I don’t recall filing my own.

2008 we file online owe $1200 which I am fairly certain I paid.

2009 (current) we file and we owed $66 which I paid.

Now, if you recall, I have not heard anything from the IRS since 2004 (for 2003′s taxes). Today at work (which by the way, has been my place of employment since late 2001-for 9 years now) I received a phone call from someone claiming to be a local IRS agent, he left a voice mail for me to call him back, not stating what it was in regards to. After trying to wrap my head around that, I called the local IRS office which doesn’t accept incoming calls. I then called the phone # that this “agent” left for me, and was directed to his voice mail, where he did state his employee id# on the message as well as stating he was with the Internal Revenue Service. I left him a message to call me back and have yet to get a return call.

My problem/issue with this is, I’ve received nothing in the mail from them for almost 7 years and then all of a sudden they call me. I didn’t realize that the IRS operated that way? There have been many things going on over the last 7 years, (i know a lot of people make that excuse but in my case I really do believe it’s true-if I could explain everything in detail you would understand) and yes I still have a son who will be 18 this year, who I still support in every financial way even though he still lives with his father and “on paper” it looks like he is 100% supporting our son. And no, I don’t have “receipts” for anything because I truly never thought I would need them.

Is it standard practice for the IRS to contact you via a telephone call, out of the blue? They’ve known where I’ve worked since 2001, I’ve never gotten any documents from them, and it seems a little odd that they would communicate this way instead of through documents.

What is my recourse here? I understand I can file back taxes at any time. My issue is with the amount that could be owed that would put my family in a financial crisis, which in a weird way is what I was trying to avoid all those years ago that I didn’t file. Is this “phone call” that I received an attempt at an audit?

sorry for the VERY long post, I truly am….I am just looking for some answers to my very detailed problem.

May 12, 2010 at 6:08 pm
(121) William Perez says:

Kat, the IRS typically does not initiate contact with a taxpayer by phone. Almost always, the IRS will send a letter as their first point of contact. That being said, one of my clients this year was contacted by phone before any letters were sent out.

I strongly urge you to seek the assistance of a tax professional. Attorneys, CPAs and Enrolled Agents are licensed to represent taxpayers before the IRS. In other words they can act as a go-between and talk to the IRS on your behalf.

There’s a number of possible of reasons the IRS might want to talk. And you’ll be more in control of the situation if you can find out what the IRS wants, then do any information gathering, and then get back to them.

June 7, 2010 at 10:08 pm
(122) CW says:

I had a tax service negotiate several years of back taxes and wiped out seveeral years’ worth of taxes. I paid this service a lot of money, but they saved me three times as much. Question: How much of the tax preparation fee can I deduct on my return?

June 7, 2010 at 11:12 pm
(123) William Perez says:

CW, tax preparation fees are a miscellaneous itemized deduction subject to the 2% of adjusted gross income threshold. So if you itemize, you may be able to deduct some of those fees.

June 14, 2010 at 11:25 am
(124) TCJ says:

William, as bad as it sounds, I am glad to know that other people are in the same situation as me – and that I am NOT alone in the not filing back tax returns.

My story is that I was late filing a few years 1992-1996. When I filed those years, using a tax “professional” (she was a CPA), the IRS said that I owed for 2 years and that I had refunds for 2 years. I think we broke even on one year. Anyway, the years with refunds were rejected because they were past the deadline. However, the IRS said we owed penalties and interest on the other years – while keeping our refunds.

I promptly sent them a letter saying they could keep the refunds as credit towards the taxes owed. The CPA showed NO TAXES owed on any of our returns.

When I went back to the CPA, she had closed shop, and left town — and all our records were gone. I couldn’t file the following year (1997) because I didn’t have the tax amount, etc to put in the corresponding boxes on the return.

Unfortunately, that problem has snowballed since then. Now, my oldest daughter is a rising high school senior and we’re about to start applying for college. I just found out this morning that the FASFA application *requires* tax return information for the past 2-3 years… and I DON’T HAVE IT.

So…. now I need to file. I’m pretty sure we can show a refund or zero due for 1997-2009. William, I’m honestly scared of going to jail… or being totally publicly humiliated. We live in small town USA and everyone knows everyone else’s business. I can’t go to a local CPA… for fear of other’s knowing the outlandish story of my not filing a tax return since 1996. It’s awful and the ONE THING that constantly eats at me on a daily basis.

My wife doesn’t even know the entire situation. I don’t tell her because I want her to have plausible deniability if I should be arrested.

What can I do? I’m desperate and scared!!

June 15, 2010 at 6:25 pm
(125) William Perez says:

TCJ, you’re not going to jail. And I wouldn’t worry about shaming either. CPAs and other licensed tax professionals are required to keep your information and details confidential.

Basically you just need to file. It’s more important to file the actual return than to do anything else. Once you file a return, then you’re eligible to set up a payment plan or make some other sort of arrangement with the IRS regarding your outstanding balances. The key here is that filing comes first. Figuring out how to pay the IRS is the second step. And it’s possible (and I’ve seen it happen) that maybe you’ll come out even. Any refunds from your more recent tax returns will be used to pay down what you owe for earlier years.

If you have further questions, feel free to write back in the comments or on the forum.

June 18, 2010 at 6:21 am
(126) Jguy says:

Quick question for you. I am a dual citizen and didn’t know I had to report my world income until recently. I have only ever lived Canada and now recently in the orient. I am American through my family, but have never lived or worked in the states. Anyways, I am now back filing like mad and had a question. What info should I put for those years? The address and marital status I have now, or the status and address of the year I am filing for. Thanks. Love the info.

June 18, 2010 at 6:29 pm
(127) William Perez says:

You will report your marital status as it was on December 31st for each year. For your address, use your current mailing address.

June 25, 2010 at 6:07 pm
(128) Danita says:

Hello……….Please help me! The father of my three children died June 6th 2010. I found out he had not filed taxes in 7 years. I am cleaning out his apartment with my children, he has no other family in town. I have found W2′s from several years all from LLC’s which he was famous for setting up. He was in constant pursuit due to lack of child support along with several other creditors. I want to get the most for my children through social security. I am told that if I can find all this tax info from years past, file the returns then my children will recieve a higher monthly income. Having said that I don’t want to spend alot of time for another 50 to 100 a month (total family max) but if it would make a difference of 1000 or 2000 a month then it would be worth my efforts. I also found trust returns which he was the beneficiary with a hefty amount every year, the lowest being close to 70,000. If it’s worth me filing tax returns for him after his death is there a certain number of years going back that would max out for the highest social security payment? Needless to say I am so frustrated to find all this info due to the fact he was behind over 20,000 in back child support just in the last three years. I would like to recoup any or as much as possible for my children. Thank you so much. I want to make the smartest move with the least amount of frustration and the best position for my children.

June 25, 2010 at 6:54 pm
(129) William Perez says:

Danita, sorry to hear of your loss. Here’s a few tips I can think of to help you through this process. First, when a person dies, someone will need to be appointed to file his tax returns. If such a person is not appointed under a will or appointed by the court, then a closely related family member such as a spouse or child or parent will need to step in and file the returns. Second, there’s a strict time limit for ensuring Social Security credits of 3 years, 3 months and 15 days following the end of a calendar year. Third, any refunds from the IRS or the state where he lives will be utilized to pay off child support and other debt obligations for which the federal government acts as a collector. Finally, I would recommend that the family member who takes care of these tax matters consult with an attorney and with an accountant. There may be legal and/or tax issues relating to the trust of which he was a beneficiary, and the various LLCs he set up may need to be shut down, with final tax returns for the LLCs as well as any 1040s.

July 13, 2010 at 11:22 pm
(130) Jacqui says:

William,

I (or when I was married, my now ex-husband and I) have filed late several times over the last 12 years, usually for a block of two or three years at a time. I know there have been a few years that have never been filed, but due to disastrous record-keeping, I’ve no idea which ones.

I’ve been slogging through the IRS’s site for hours, trying to find the form, the email address, or the magical incantation I need to get the information I’m looking for, preferably without having to attempt to navigate the IRS phone system. One headache and one lower eyelid muscle twitch later, I have almost given up.

Can you point me in the right direction, please? It would save me the cleanup after I utilize interpretive dance and the ritual sacrifice of a chicken in an effort to divine the answer, and I would appreciate that more than I can express with mere words.

As would the chicken, I’m sure.

Thank you!

Jacqui

July 13, 2010 at 11:51 pm
(131) William Perez says:

Well, Jacqui, it’s not every day I get to save a life. So I best take the opportunity while I can.

To find out which years you have or have not filed, you will need to do one of the following three methods.

1. You can call the IRS and ask. Personally I find this method the quickest way to find out the answer.
2. You can utilize Form 4506-T and either mail this to the IRS or take it to a local IRS office. What you want are either the Account Transcripts or the Record of Account (check box 6b or 6c). You will need to specify which years you are inquiring about. The transcripts will show (for each year requested) whether a tax return was filed, payments and refunds made, and various other actions taken by the IRS. The thing to remember is that these are specific to a particular year, and sometimes transcripts older than three or four years might not be available.
3. Or you could consult with a tax professional, who will then use either method 1 or 2 above.

If you really want to utilize a magical incantation, you can say “hakuna matata” three times while eating broccoli :-)

July 31, 2010 at 1:45 am
(132) Eric says:

This site/page is fantastic! I havent filed in 8 or 9 years, for a number of reasons….all of them stupid. This site answered all of my questions about filing late, possible repercussions and penalties and has taken ALOT of stress and worry off my mind. I’ve seen so many people on here asking the exact same questions as I’ve had. Thank you so much for creating this site/page. It was exactly what I needed.

August 2, 2010 at 4:27 pm
(133) DEBBIE says:

MY FATHER PASSED THIS APRIL, he was a disabled vet collecting benefits (which I realize are not tasable), he also received a postal pension. I just filed his 2009 taxes because he was very ill the last two months of his life, & realized that he didn’t file them and know that I have to file his last year of life taxes (2010) by April 2011. I have no documentation that he ever even filed taxes, and believe that he may have thought he was exempt. How would I go about finding this info or should I wait to hear from the IRS? How long after the persons passing can they request this. I am the executor of the estate and don’t want to distribute until I know nothing will come back to haunt me.

August 14, 2010 at 7:11 pm
(134) Carol says:

My sister passed in April 2010. She was receiving notes for taxes for 2001,2002,2003, etc. The taxes were between 8,000 and 9,000 for each of those years. She never file taxes aleast in the last 10 years. I am the executor of the estate and don’t want to distritue until I know if these taxes should be paid?

August 16, 2010 at 7:23 pm
(135) Charles says:

I need some help. I have been working outside of the U.S. since 2000. I went back in for only 1 year from 2007-2008 and now I am back abroad. I need to file back taxes form 1999 until now but not sure on how to go about doing it. Can you help

August 30, 2010 at 8:10 pm
(136) Kimberly says:

I need to file taxes for ’07, ’08, and ’09. I know I can get copies of wage documents needed from the IRS; however, can I also get mortgage statements, like interest, etc., from the IRS?

Thanks for this site. As others have said, it is great!

August 30, 2010 at 8:43 pm
(137) William Perez says:

All tax documents reported by third parties to the IRS can be retrieved from the IRS. Use Form 4506-T, and mark box 8 for “Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript.” You can obtain this yourself by writing to the IRS or visiting a local IRS office. Your tax advisor may also be able to obtain this transcript direct from the IRS using a computer or a phone call.

September 28, 2010 at 4:50 am
(138) Jess says:

William,
I just wanted to throw a quick “Thank You” for this page and the wonderful info that has helped me out already. I have already sought out a tax professional before this to help me prepare my non-filed taxes, but not much else on info, except just file and see what happens. I had been holding onto the documents that are ready to be filed after I received then from the tax people because I was just “Crazy Scared” to turn them in. I was fearful that I was going to be hit up for insane demands for full payments and/or got to jail, or both. LOL! My thoughts were “Go to Jail, Do not Collect $200 for older than 3 year old Tax Refund, Go Directly To Jail!”

Your page and the wonderful and brave persons seeking to do the right thing, and admitting the wrongs of not filing, have given me the courage to march into the IRS office and get that stamp. THANK YOU!!!

October 18, 2010 at 4:56 pm
(139) Dan says:

I haven’t filed taxes since the year 2000 and recently filed for bankruptcy. My attorney needed my last filed tax return so I filed for 2009. I just recieved a refund from the IRS. Do I need to fil all the way back to the year 2000 or just six years? I was self employed in 2000 and 2001. The rest of my income has had taxes taken out of paychecks. Thank You.

October 26, 2010 at 7:58 pm
(140) Ronald says:

William, when filing back taxes do you have any advice on finding an affordable trustworthy CPA/Enrolled Agent. I’ve been reasearching the internet regarding back taxes and have come across so many complaints about these national tax agencies, especially JK Harris. I actually took the time and read all 46 pages of consumer complaints at consumeraffair.com and it’s horrible how this company can still be in business.

http://www.consumeraffairs.com/finance/jk_harris_p7.html

October 27, 2010 at 4:04 pm
(141) William Perez says:

Ronald, my advice on finding a good accountant uses more old-fashioned methods such as asking friends and family for referrals. Chances are someone you know knows of a good accountant. And then try calling them up. An honest accountant will let you know right away if they have the skills and expertise to handle your project and if not will refer you to another accountant who might be a better fit for your needs.

November 22, 2010 at 11:00 am
(142) Kathy says:

William –

Mom died at age 63. Mom has 4 adult children. Mom (an only child) lived in her childhood home which, as it turns out, was still in the name of her decease parents (died in 1986 & 1988)(“grandparents”). Said house is being sold by heirs of grandmother’s estate which are Mom’s 4 adult children. Per Probate & Land Court, time passage requires P&S, Deed, HUD, etc. in names of 4 adult children, not “Estate of…). Mom didn’t file income taxes in 2004, 2008 & 2009. She only made aprox. $32K per year. Mom’s estate has no money. Estate Atty. says he has to hold the some of proceeds from the sale of grandparents home to cove possible IRS/State Income tax on Mom. Why? Not part of Mom’s Estate. Estate Atty. said there is a “follow the money law”. Your thoughts?

December 31, 2010 at 3:36 pm
(143) William Perez says:

Kathy, I am sorry to hear about your Mom’s passing. My condolences. I am not an attorney, so I am not qualified to answer these sorts of legal questions. Perhaps the house is part of your mom’s estate? Also, the probate court might require to see the tax returns and tax payments before allowing the remaining funds to be disbursed to the heirs.

November 23, 2010 at 5:27 pm
(144) Tom says:

I moved to WA state fro MN for the tax year of 2006. There is no state income tax taken out there. I got a letter that Mn claimed I needed to pay state taxes and did not file a return. I set up a payment arrangement to pay on the account until it was reolved. I filled out a M1PR and it was resolved that the state would be refunding me what I paid in, in excess of collection fees. How long should I expect to wait for my refund and how much extra?

December 20, 2010 at 12:11 pm
(145) Merideth says:

I am about to file my state taxes for the past three years. 07,08,09. I waitressed part time back in 07 while between jobs. I am certain I will owe for that year but believe I should be getting money back for 08, and 09. I have all my w-2′s. Is it as simple as pulling the tax forms, filling out the appropriate info and sending them all together in order apply the credit toward what I will owe in penalties and interest? OR would you suggest I work with a tax professional?
Thanks~

December 31, 2010 at 3:44 pm
(146) William Perez says:

Merideth, it can be as simple as filing out the required paperwork and sending it in to the IRS for processing. Your 2008 and 2009 returns will likely be processed quicker than your 2007 return. If the IRS sends you any refund checks, you should hold onto that money so that you can use it to pay any balance you owe for 2007. However if the IRS already thinks you owe them from 2007, then they will hold onto your 2008 and 2009 refunds until they have finished processing 2007.

December 31, 2010 at 2:48 pm
(147) Mike says:

Hello Mr. William,

I am a US citizen. I worked in United Arab Emirates for 4 years (1994-1998). As far as I remember, I filed for taxes for all of the 4 years (not sure about my last year). Then I went back to the US and opened a small pizza restaurant that I closed after 7 months (I went out of business). After that I went to Syria and worked for 2 years and now I’m working in Kuwait for the last 10 years.

I have never filed taxes ever since I went back to the US from UAE. So, I did not file any taxes for the lost business and also for working 2 years in Syria and now for my 10th years in Kuwait.

My salaries has never exceeded $60,000 USD (I believe thatís below the tax-credit limit for foreign earned income to any of the years).

Therefore, I would appreciate any information you could provide as to where I stand now, from a legal point of view. I want to straighten things up, but am a bit uneasy about it. My big concern is the year that I had the restaurant.

Thank you, and best regards,

Mike

December 31, 2010 at 4:00 pm
(148) William Perez says:

Mike, the general process I take is as follows: find out which years are not yet filed, and find out if the IRS or any state have created assessments for those years. From there you and your accountant can develop a plan for which years need to be filed. The years you were working abroad will likely produce little if any tax due to the foreign earned income exclusion. The year during which you operated a business in the US is a bit more tricky, and there’s a number of issues to consider. Do you still have records? Did you make a profit or incur a loss? Did the business have any type of formal structure such as a corporation or LLC? Did you have employees? Were the payroll taxes paid and the forms filed? You will likely benefit from the advice and assistance of an experienced tax professional who can help you document the business finances and prepare an accurate tax returns. The other years are likely to be more straightforward.

December 31, 2010 at 4:49 pm
(149) Mike says:

Mr. William,
I want to thank you for the valuable advice you gave me. I understand now that I will need assistance of an experienced tax professional to do my lost business documents.

But would you please allow me to follow up on your questions in your advice.

You asked: Do you still have records?
-yes most sales records (in/out) on Excel spreadsheets. But I have none of the expenses or any receipts. I know that I’m in trouble here.

You asked: Did you make a profit or incur a loss?
-No profit, I was actually losing big time on most of the months. Paying for operation from my savings. I even had a depression on my final few weeks that I just give up trying to make it work.

You asked: Did the business have any type of formal structure such as a corporation or LLC?
-No, it was just like a family operated small pizza restaurant.

You asked: Did you have employees?
- Yes, 2 others (max at one time) and me. I did most of the restaurant operation work. My workers kept on changing and then finding others to work with me.

You asked: Were the payroll taxes paid and the forms filed?
-There were no payroll. They my employees were mostly part timers and they were all paid in cash. Such as answering phones or delivery person with his own car.

Mr. William, I know while I’m answering your questions that I’m in deep trouble. I hope you can give me some comfort until I get an experienced tax professional help.

Thanks again, and best regards.

Mike

January 7, 2011 at 12:44 am
(150) Sarita Bhagat says:

I started earning since December 2007 and I have not filed any Income tax returns till now. Please let me know the procedure for filing IT returns for previous years.

January 8, 2011 at 1:51 pm
(151) Mary says:

Mr. Perez: Thank you so much for this informative, helpful and wonderful web-site!

I don’t THINK I have a major problem, but I’ve changed cities several times…had periods of job loss, and don’t know if I missed filing for a particular year or what my status is with the IRS.

My daughter believes that I am paid up and that the IRS is now taking money that they are no longer owed. I wanted to find out HOW to find out whether or not I still owe them, if they owe me or if I’m all paid up and ready to start fresh with 2009′s filing.

I have been uneasy about this for the past 6 months or so, but I believe I’ve found enough information here to put me back on “Straight Street!”

I am thankful for your knowledge, and certainly your willingness to share so freely! The world needs more people like you!

January 20, 2011 at 12:52 pm
(152) Fernando says:

I have several back taxes to file, but i recently moved. when filling out the forms, do I use the address I had which corresponds to the year I’m filing, or my current address?

January 20, 2011 at 3:08 pm
(153) William Perez says:

Use your current address.

January 25, 2011 at 2:28 am
(154) Annette says:

Hello and thank you for all of the good info on this page. I am a military member who has been granted a combat zone extension until March 2011 for my 2009 taxes. I hesitated to file them earlier because I owe taxes for the first time ever. I won’t be penalized and the amount owed is not a lot, but my question is this: should I file my 2010 taxes first to get my refund and then file my 2009 taxes or since I have the extension, file them both around the same time. I have to mail in my 2009 taxes due to attaching the Statement of Deployment to the return that was signed by my Commanding Officer stating I was in a combat zone from January to July 2010. I would like to e-file my 2010 return since I am getting a hefty refund due to combat zone tax exclusion. Should I just e-file, wait for the refund and then pay my 2009 taxes then??? Thank you for the help!

January 25, 2011 at 3:49 am
(155) William Perez says:

Annette, if the two tax returns are going to be filed with the IRS relatively close together (say roughly within 2 to 3 months of each other), there’s not going to be much of a difference. Your refund from 2010 will be mailed out to you, and then you’ll mail in separately your payment for 2009. However if you prefer to have the IRS hold on to your 2010 refund so they can apply it towards your 2009 tax, then I’d recommend you mail in the 2009 return, wait until you receive a letter from the IRS stating you have a balance due (in about 8-12 weeks), and then file your 2010 return. At the end of the day, however, this is really about timing and which method you would prefer.

January 25, 2011 at 3:42 am
(156) MR says:

William: First of all, kudos to you on proving so much useful information. This page is awesome; I have it bookmarked.

I started working at the end of 2008 and haven’t filed any taxes yet, so I’m three years behind. I would like very much to file for the years I’ve missed and get this all cleared up with the IRS, but I don’t have the W-2 form I need to file for 2008. What if I can’t get the W-2 from my 2008 employer – would the IRS also have this information on file?

Also, what documentation (besides W-2s) do I need to have in order to file for previous years — and for this year? Since I’ve never filed taxes before, I have no idea how to go about this.

January 25, 2011 at 4:15 am
(157) William Perez says:

MR, thank you for your kind words. Basically, you should ask your employer for copies of the Form W-2. This will show your wage income and withholding for various federal and state taxes. You can also retrieve a copy of your W-2 directly from the IRS. Simply fill out Form 4506-T, and check the box next to line 8. The copy of the W-2 retrieved from the IRS will contain only federal amounts; it will not contain any state information such as state withholding. This information will be very helpful in preparing your state tax return, so getting the W-2 from your employer is the preferred step. (Also, employers are required to keep these forms for at least four years, so it’s likely you’ll be able to get this.)

Other documents you might need would be any 1099 forms. These would show amounts for interest income, dividends, stock sales, unemployment and various other types of income. The IRS also can provide you copies of these (it will be part of the same report you’ll receive after sending in the 4506-T form).

Generally, when I’m working on a late return, I start with this report from the IRS, and then I ask the client to write or call each employer to obtain a copy of the actual W2.

Since you’ve never filed a tax return before, I have some tips for filing a tax return for the first time. My basic tip is to draft out a tax return on paper, and then visit a tax preparer to have them look it over. I would suggest you start with Form 1040-A as it’s a relatively simple tax form. There are different versions of tax forms per year (because each year the rules and calculations change). So download the 2008, 2009 and 2010 versions of 1040A. In order to make certain calculations (such as to look up your tax in the tax tables), you’ll need to refer to the instruction booklets (which are also specific to each year). Here’s links to the 2008, 2009, and 2010 instructions for 1040A.

The nice thing about this tip, is by the time you visit a tax professional, you’ll have a list of questions to ask. And if you get stuck somewhere on the forms, you’ll be able to ask for clarification.

Now if you have types of income not listed on the 1040A, you’ll have to use the longer and slightly more complicated Form 1040. But I don’t want to overload you. Simply start putting things together, and feel free to ask any further questions either here or on the message boards.

January 27, 2011 at 12:49 pm
(158) Debbie Carlo says:

How do I find out if my taxes was filed in 2004?

January 28, 2011 at 12:56 pm
(159) Hollie says:

Hi,
I owe taxes from 2008, I have been paying the IRS in monthly payments. I owe them around $800. I filed my taxes for 2010 on 1/24/11 through turbo tax and it shows it was accepted by the IRS and I should expect my refund on 2/4/11. Will they automatically take out the remaining amount I owe them from 2008, or will this hold up getting my refund? Just curious, thanks for the help!!

January 28, 2011 at 6:24 pm
(160) William Perez says:

Hollie, you are indeed correct. The IRS will apply your refund to your outstanding balance. If your refund is more than what you owe, you’ll receive a check in the mail for the difference. If you owe more than your refund amount, your balance will be reduced by your refund.

February 2, 2011 at 10:50 pm
(161) jenny says:

william… my boyfriend is a truckdriver and in 06&07 he had his own truck and didnt file taxes but he didn’t keep any expense records and he also hasn’t filed taxes for 08&09 what can he do to get back on track…we have two kids but I usually claim them and I think that two of those years I didn’t claim one so he could claim at least one and I was also wondering if he should do 2010 taxes now or just wait until he does them all together??? He’s been getting all sorts of letters from the IRS saying that he owes and I calculated approx.. $10,000 or more but that’s what they say so I’m just trying to gather info, so I can let him know what to do?? Oh and do those companies that come out in the T.V. commercials really help or is it not worth hiring them??

February 12, 2011 at 7:58 am
(162) JJ says:

the irs did a sfr for 2001, 2002 & 2003 which i avoided doing anything until sept 2010 when i was told they were foreclosing on my 2nd home to pay off the $500,000 amount they claimed was owed. I was told by them to file all returns by sept 30th 2010 and i did which made we current from 2009 backwards. They now tell me 2001, 2002 and 2003 they are not obligated to accept or process my return and are moving forward with getting my property for what they say i owe. my returns from 2001 and 2003 say i should have gotten a refund and 2002 says i owe $2,900. I am in direct contact with the department of justice tax division and they are not processing my returns for those years what am i to do? also i was under the impression if i did not owe anything i would have those SFR removed. Is there any laws that help me in getting this in my favor? i cant hire a tax pro with another $7000 retainer. The house is owned free and clear. They have already posted and notified the county i havbe the property in that they are going to seixe my home there. Any help?

February 25, 2011 at 9:06 am
(163) Meegan says:

Hello, I have a question (many really!) I owe back taxes for several years, some filed, some not. I want to file this year and pay this years taxes. Will the payment I send the IRS go to the this years filed tax return or will the IRS use the payment I send to pay my delinquent taxes?

Thank you for reading my question

February 28, 2011 at 10:15 pm
(164) William Perez says:

If you pay your 2010 tax when sending in your 2010 tax return, the IRS will apply the payment to 2010. If you’re filing electronically, be sure to use the 1040-V payment voucher the software provides you when sending in the payment. Otherwise, the IRS will apply your payment to the oldest year first.

March 9, 2011 at 3:32 pm
(165) Cathy says:

Hi! We filed for a extension in 2009. I have fibro and forgot about them. No wmy mortgage company is asking for the extension and of course it is out of date. what can i do

March 10, 2011 at 10:07 pm
(166) William Perez says:

I don’t understand why your mortgage lender wants a copy of your extension. Usually they want copies of your tax returns.

March 19, 2011 at 8:38 pm
(167) Pat M. says:

I havent had any income since 2007, how do I file taxes for 07-08-09 and 2010

March 19, 2011 at 10:05 pm
(168) William Perez says:

Pat M., if you had no income for those years, you might not be required to file a tax return.

March 24, 2011 at 5:36 am
(169) shirley says:

Thanks for all of the helpful information on this websit!

My first question, I worked and filed tax at 1996 to 2002 then stopped working and filing until now. for the three-year time limit for Social Security credits. is that means I will lost all the prior year of social Security credits 1996-2002 that I filed, even I start file now is that social Security credits only count me as the first time filing.

2nd question, I have been selling on eBay since 2007, and I’m trying to file for the past three years. but honestly I’m not a good organize person. many receipts can not been found. since my gross income are just about 20000. can I report the inventory and expense in approximately?

April 4, 2011 at 2:02 pm
(170) tina says:

Is there an address to send those old returns to or can you just send them to the normal address.

April 5, 2011 at 4:10 am
(171) William Perez says:

Mail in your tax returns to normal mailing address. You can find a list of mailing addresses for various IRS Service Centers on the IRS Web site.

April 10, 2011 at 11:30 pm
(172) caroline says:

I got married last year, I am needing to file my returns for before I was married. My questions are, When doing the past years returns Do I file as my status before I was married, along with my name before I was married? I assumed I would file my return as if I was in that year?

April 13, 2011 at 9:00 pm
(173) Olivia says:

I just filed my back taxes today but I did not send them through certified mail, Now I am worried that I should have. Does anyone know if it will take longer this way or should I have to be worried?

April 13, 2011 at 9:11 pm
(174) William Perez says:

The benefit of certified mail is that you have proof of delivery to the IRS. This is sometimes useful if, for example, your tax return gets lost at the IRS. That doesn’t happen very often. You can always call the IRS in about a month or so to confirm that they received the tax return.

April 13, 2011 at 9:17 pm
(175) Olivia says:

Thanks William.

April 21, 2011 at 12:23 pm
(176) Vinny says:

I’m about to file 7 years of unfilled back taxes. my question here is, can I file for the Earned income Child credit on those 7 years ?? or do they have time limitation ???
I have 2 children ages 14 and 7 yrs old.
Thanks for any help….

April 21, 2011 at 1:45 pm
(177) William Perez says:

An excellent question, Vinny. You have three years to request a refund of any overpaid tax. As of today (4/21/2011), the only years for which you can still receive a federal tax refund are 2010, 2009, and 2008. Refunds from ’07 expired on April 18, 2011.

The case of the earned income credit is particularly interesting. On the one hand, you won’t receive any refunds from the earlier years (2007 and prior) from the earned income credit. On the other hand, taking the EIC and other tax credits can help reduce how much you owe to the IRS for those years. Do be aware that the IRS can disallow any tax credit if you request that tax credit more than 3 years after the due date of the return. Although, to be fair, I must say I’ve only seen the IRS deny tax credits in one particular case so far.

May 3, 2011 at 10:40 am
(178) casey says:

also when filing back tax returns if you were due a refund(that its too late to get) what should you fill out on the 1040 form in terms of the refund? do you enter your account number for the direct deposit or have it added to the next years return? even if that year you wont get the return either? is there anything i should be aware of in terms of printing these tax returns? like things having to be in all caps or is it okay to print them out in strictly black ink or does it have to have some color to it? anything you can think of im spazing out and i pretty sure my hair is thinning from me pulling it out!

May 24, 2011 at 1:47 am
(179) Yvette says:

Hi! I was unemployed the year 2009 & 2010 I never filed a tax retun for 2009, but in April 2011 I filed Federal for 2010 on unemployment I had received. Can I still file for 2009 for the unemployment I received that year or do I have to wait until the next tax season rolls around Thank you.

May 24, 2011 at 4:14 am
(180) William Perez says:

You should file a tax return for 2009 to report any income for 2009, such as any unemployment benefits you received in 2009. Do be aware that in 2009 (and in 2009 only) there was a special tax break in which the first $2,400 of unemployment benefits are non-taxable. If you need to copies of any tax documents (such as Form 1099-G for your unemployment benefits), you can obtain copies of any documents filed with the IRS by asking the IRS to send you an income transcript, which will show all income-related tax documents filed with the IRS.

May 24, 2011 at 8:20 am
(181) Jess says:

Hi William, amazing resource – thank you for your site!

My question is based on foreign income earned. I’m a US citizen but moved to the UK in 2002 after I married a Brit. I last filed in April 2003 for all 2002 US earnings but didn’t realise that I needed to file once I began earning foreign income (and paying UK tax) while abroad.

I now understand I need to file regardless of where I earn money. Thankfully the UK tax % is higher than US so it’s unlikely that I’ll owe any money – and understand that no debt equals no penalty. However, a tax lawyer I approached said I will have to pay 25% of my highest monthly bank balance as a penalty for not filing. Do you understand that to be the case as well? I’m not a wealthy person trying to hide money, so the ‘highest balance’ won’t be a lot but I can’t find this ‘rule’ anywhere in my research and hoped you could advise.

I’ve never received any communication from the IRS so suspect I dropped off their radar. Should I go to the IRS office in London to discuss in person or continue with the tax lawyer?

Thank you for any help you can offer!!

July 17, 2011 at 5:17 am
(182) charles says:

I haven’t filed taxes fed/state since 1993 I worked 94-98,99-2004 2008-2009 haven’t maintain work since live off retirement money about11k annual 1 dependent (self) estranged spouse whereabouts unknown getting afraid of myaction also about 5 yrs to early social security elgibilty what to do also homeless since 2004 no tax income(w2 records correspondence.advice please

July 19, 2011 at 12:51 pm
(183) Katy says:

I cashed in some stock in 2010 and when I filed my taxes, I ended up having to pay in. I am having some funds taken from my paycheck. Now, I just filed 2011 taxes and i am getting a small refund. Does this reflect what I owe? or is this what I actually get for a refund and then the irs will just keep it and apply it to back taxes. So confused! any ideas, please help.

August 4, 2011 at 7:04 pm
(184) Mike says:

I have read a lot of your articles, but I remain confused about filing a late return in order to claim an overpayment refund. I had understood that if the taxpayer timely (by April 15th of the year following the Tax Year) filed an Extension request, the filing due date would be extended for six months (in the ‘old days’ the automatic extension was for only 4 months, at which time a second request for extension had to be filed to obtain an additional two months). The current result of an Extension request is to push the filing due date from April 15th to October 15th. Now here’s my question: If I have an overpayment but do not file a tax return by the October 15th extended due date, and instead wait until the last moment to do so to avoid a forfeiture, isn’t the three year period to file a claim for refund measured from the April 15th filing date PLUS the Six Month Extension, that is, October 15th? For example, for TY 2007, if the Extension was timely filed by April 15, 2008, doesn’t the 3 year limit to file a return claiming refund expire on October 15, 2011?
In mid-August, thinking I was filing 2 months before expiration of deadline, I filed my return. Now IRS is telling me I had to file by April 15, 2011. I had wage tax withholding and IRS says the withheld tax is deemed payed on April 15, 2008 and that a refund claim must be filed within 3 years of tax payment regardless of whether or not an Extension was filed. Sorry for the length of question, but could you please clarify for me and other readers regarding the measuring of the 3 year time period to file a late return claiming a refund?? Are there two 3 year periods, one measured from the extended filing due date and another measured from the April 15th date. I am so confused!

August 20, 2011 at 11:04 am
(185) Ron says:

My wife and I owned a business 50-50. Income tax returns for corporation and personal were prepared by CPA 2003-2009 but wife refused to sign jointly or file any return.

As a result I filed as an individual. She received her Green Card in 2004.

Now in discovery phase of divorce. In my counter petition I asked for lump sum alimony in the amount of $5000 to hire tax attorney to protect myself. Her failure to file income taxes is revealed in the counter petition.

She is wealthy and I live on social security.

I contend I never received a dime of income from corporation.

What is the worst thing that can happen to me in this situation?

September 9, 2011 at 1:20 pm
(186) fred says:

in the 90′s i did not pay any or much self-employment. i am being audited for 2005-2010. do they go back and make me pay those old years. i have no records

September 9, 2011 at 4:20 pm
(187) William Perez says:

Normally, the IRS is limited to auditing tax returns for accuracy for the previous three years, measured as three years from the date the tax return was actually filed. It is unlikely that the IRS would audit for a year earlier than 2005 if those returns were filed at least 3 years ago.

September 16, 2011 at 3:40 pm
(188) Sharon says:

I have a friend that owes $6,625 in back taxes for 2010. He filed for an extension until 10/15, because he is in the middle of a divorce settlement and hoped that the divorce would be final by now and they would come to an agreement on the joint debt, it’s still going on after 2 years.
Unfortunately, he was also laid off on August 1 and is looking for employment,but is paying child support out of his unemployment checks. On 10/15, should he pay at least $100 toward the current debt or should he call the IRS and let them know what’s going on? Were they supposed to pay the full debt on 4/15? They will be charged interest on the debt now, correct?

September 25, 2011 at 4:48 pm
(189) Sam says:

Dear William,

First Thank you for doing a great job here. I was self employed, teaching neighborhood kids and earning little money for last three years. I have not filed tax returns because I was making less than required amount to file. Now I want to file those returns. How do I go about it? Should I get a tax accountant to help me or can I do something like this myself? Thank you

October 7, 2011 at 11:59 am
(190) Jay says:

Hello, I owe over 15,000.00 in back taxes from 2002,2003,2004,2005 and 2008. I am currently on a payment plan of 250.00 a month. every payment is applied to my oldest taxe debt. i only owe 700 for 2008 and my payments never go to that debt. Is there anway for me to do some sort of compromise offer to settle with the IRS for less than i owe? also how long do they have to collect on taxes owed??

December 1, 2011 at 8:06 pm
(191) KatC says:

Hi, I owe taxes from 2008 which now I’m paying on but, when I called IRS to set up payment arrangements they said that I needed to file for 2009 because I had won so much at gambling around 8000 they said if I did not file I was gonna be audited. I was unaware at filing taxes that year because I had probably lost more than what I had won. The lady at IRS had told me to go to IRS website and fill out the stuff and send it in but, I don’t know what I should be filling out and I have no papers from the casino showing I won. How will I get that and How do I show my loss for that year? My other question is how would I be audited if you have a 3 year period for this stuff? So confused please help!!!

December 5, 2011 at 3:11 pm
(192) William Perez says:

KatC, the IRS will attempt to reconstruct a tax return for you if you don’t file one for yourself, a process called a substitute for a tax return. Basically, the IRS will add up all the income it knows about, and send you a tax assessment. If you incurred gambling losses, you’ll need to prepare your own tax return to take that into account. As for the 3-year audit statute of limitations, the three year period begins from the date you filed a return. If you haven’t filed a return yet, then the statutory period hasn’t begun yet either. The IRS will not set up a payment plan under all tax returns have been filed, so it’s important to get your 2008 return filed, and then you’ll be able to set up a payment plan.

December 20, 2011 at 5:35 pm
(193) john says:

Hi I owe for BP claim as a small buisness owner.I didntfile last year the claim i recieved and dontplan on doing it this year but i plan on doing it next year . Can i do this in Louisiana?

December 27, 2011 at 9:33 am
(194) kathleen says:

Thank you so much for this information! Can you please talk about calculating interest on back taxes? Is it calculated as a flate rate once per year for every year not filed? I understand and have calculated the other applicable penalties but am onfused about interest.

December 30, 2011 at 6:06 pm
(195) William Perez says:

Kathleen, interest charged by the IRS is compounded daily, the rate fluctuates every three-months, is calculated on the entire amount owed to the IRS (including penalties).

December 31, 2011 at 12:35 pm
(196) kathleen says:

William thank you for your answer. I am trying to “estimate” what my interest charges will be, before sending in my returns and check to the IRS. I am extremely nervous at not knowing what to expect. If possible, could you give us a brief tutorial of the math involved in calculating compounded daily interest? It would mean so much to my peace of my mind….I cannot afford a tax professional and must do this myself. please help .

December 31, 2011 at 8:51 pm
(197) William Perez says:

Usually, I just calculate simple interest assuming a 4% annual rate, prorated to the amount of time that the payment is late. This gives me a ballpark figure for how much interest to expect. That being said, the IRS will calculate interest and penalties, and send you a notice stating how much those are, and generally gives you a 30- to 45-day grace period to pay in full without incurring further penalties and interest. So in most cases, the advice is to pay as much as you can, and then wait for the IRS to send a follow-up notice with their calculations of any remaining amounts to be paid.

January 3, 2012 at 12:00 am
(198) Connie says:

I have just completed my taxes for 2007-2010. I have printed all the documents and they are ready to be put in themail.

We owe a good amount and don’t have money to send to the IRS right now. Is it still a good idea to send the tax forms in even without a payment. We do get refunds from a couple years but, with the years we owe, we still have a balance.

I was told by a friend that the IRS will contact me in regards to the total owed with penalities and then I can set up a payment plan. Is this true?

January 3, 2012 at 12:59 am
(199) William Perez says:

Connie, it’s okay to mail in your tax returns without payment. The IRS will process your returns and mail you letters (one for each year) detailing how much you owe (with penalties and interest) or how much of a refund you have. After the IRS finishes processing all your tax returns, you’ll then be eligible to set up a payment plan to pay off your remaining balance owed to the IRS.

January 25, 2012 at 10:00 pm
(200) Stacey says:

Hi! I have just recently helped my uncle file his 2011 taxes online. I then learned that he hadn’t filed his taxes for 2010. My question is this…Can I go back just days after doing the 2011 filing and then file his 2010 taxes in the same manner without causing any problems?

January 28, 2012 at 4:15 pm
(201) William Perez says:

Stacey, your uncle can file his 2010 tax return any time. But the process is going to be a little different. First, you’ll need software specific to the year 2010. Second, you’ll need to mail in the tax return for manual processing.

January 30, 2012 at 3:28 pm
(202) john says:

Just received a tax bill from NY from 11 years ago…am I responsible for late fees/interest? Why would a state wait 11years to inform someone of an error? Is there a statue of limitations?

January 30, 2012 at 7:04 pm
(203) Jenny says:

HI – I’m trying to help my brother who hasn’t filed a tax return since 1994. He’s had years that he made 50-60K and some years only 15-20K.

He says after missing the first two years (’94-’95), he was afraid to file in fear of going to prison. Is prison a reality for him or can he get back into the system without criminal prosecution?

January 30, 2012 at 8:00 pm
(204) William Perez says:

He should file all missing tax returns as soon as practical.

February 7, 2012 at 1:17 am
(205) Estela says:

Hello William, your page is awesome thanks so much for all the information and time you have put in it :)

I’m trying to help out my BF to file his back taxes, he hasn’t file since 2001, he didn’t work for about three years , and then he started working as a cab driver and has seven years working as cab driver but hasn’t file any year, my question is does he has to file for those years he didn’t work? can he file me and my son as dependent’s? because we actually are dependent’s but he is not my son’s father and we are not marry and he has been providing for us for about 5 years

also can you please tell me what are all the forms that I need to fill out to file his taxes as a cab driver? I’m using schedule C, Schedule SE and the 1040… is there any other form?

Do you think he should we a professional to help him in this case?

thank you so much for your time

February 7, 2012 at 3:42 am
(206) William Perez says:

Estela, it appears you have a good grasp of the situation. Taxicab drivers are often independent contractors, and so the forms to fill out are indeed the Schedule C and Schedule SE. I do recommend filing for all years that have not yet been filed. This creates a continuous record, so to speak, of his income history, and the IRS will require that all years be filed before they’ll set up a payment plan. So if a payment plan might be necessary to deal with his accumulated taxes, then filing all the years is going to be a first step. Whether he’s eligible to claim dependents and/or Head of Household requires a separate analysis. But once you sort out that, it should remain the same for most years. As for hiring a tax preparer, what I suggest is that you first draft out the tax returns, making note of any questions or confusing points, and then go see an enrolled agent or certified public accountant. They can then look over your drafts, and make any recommendations.

February 7, 2012 at 1:16 pm
(207) C says:

Hi William, I started my NYC state taxes in 2009 and 2010, but since I was interning and working part time I was unable to pay the taxes owed and didn’t file. In fact I am still not sure if I will be able to afford the taxes and penalties, would you still advise to file now? Also, I don’t know much about filing taxes since I have always done them electronically so I was wondering if I should contact a professional? And I will receive a small state refund this year ($14) but was wondering if I should wait to file those until I have done the ones from previous years. My federal taxes are all up to date. Thank you for all your help, this is a really informative page.

February 23, 2012 at 12:22 pm
(208) Misty says:

My husband and I have always taken care of our Federal taxes. But it’s been hit or miss the last 5 or so years filing our Utah state returns. We have never received any notices in the mail regarding those missed years. Last year we owed State taxes, filed a state return, and paid our bill. What happens if we don’t file again this year? Is there a reason we have not received notification on the other years we have not filed our state returns?

February 25, 2012 at 7:10 pm
(209) Sunny says:

Hello! If the IRS held my refund as I filed past the deadline, is that amount tax deductable in the year denied? Also, regarding the 1st $2400 of unemployment in 2009, how does that get reflected on the tax forms? Thank you very much!

March 24, 2012 at 2:40 pm
(210) Brenda says:

back in 1979??? i was going thru a divorce and several other things in my life and i did not file my return. I had forgotten all about until about 20 yrs ago i came across the papers. An agent for H&R block told me not to worry about and I forgot it again. My question is should i do something about this now?? I have found out that my ex filed the kids on his return in another state and they were living with me. Normally I would have gotten a refund but with that I may not have. I can prove the children were with me by using school records, if there is such a thing as that after all this time.

March 24, 2012 at 2:50 pm
(211) William Perez says:

The year 1979 is now closed for refunds. Refunds expire after a 3-year statute of limitations that begins with the original filing deadline (usually April 15). Also, the IRS would have contacted you by now if they thought you had an outstanding balance of tax to pay them.

March 24, 2012 at 9:01 pm
(212) george says:

i filed my taxes from last year electronically and got my refund in 3 days, however i forgot about the previous tax year, 2010. so i paper filed those the same day i e filed my 2011. will i still recieve my 2010 refund? if so, how long approx?

March 25, 2012 at 4:29 pm
(213) William Perez says:

Refunds from previous years take longer to process. Expect your refund in approximately 12 to 16 weeks from the date you mailed in your tax return.

March 28, 2012 at 6:56 am
(214) Karen says:

Hi William,

Thank you so much for the site! I’m trying to help a friend who is in the following tax situation which seems daunting on many many levels!
1) He works for a small family business since 1998, which is incorporated (his name is on the corporate docs I think);
2) has never received 1099 or W-2 forms; company pays all employees under the table (does not pay state general excise tax, etc., either but I guess that’s a different issue); company does not pay payroll taxes, unemployment or etc to IRS;
3) has never filed federal taxes before
4) has received 1099s from small contract work outside the family business, $10000 per year or less, for the past 3 tax years, 2009-10-11 (but hasn’t filed)
5) now wants to come clean (and join law enforcement); he’s trying to resolve the state GET tax issue with legal aid but hasn’t tackled federal yet. He needs 3 years of returns for starting in this job.
6) the company has not explored bankruptcy or investigated options for restitution for the federal taxes, nor has he.

Do you have any idea where he should start? Should he file for what he has 1099s for and amend later if/when the family business can supply W-2s? Would filing 3 years of late returns as a 31 year old potentially trigger an official audit because of the low $ amount and for not having any filing history prior to that?

Thank you for any assistance, as he feels overwhelmed but wants to start doing the right thing.

March 28, 2012 at 6:59 am
(215) Karen says:

Oh, and to add to the above, he can document his gross earnings from 1998, they have very good records despite the tax negligence. thanks

March 29, 2012 at 4:45 am
(216) William Perez says:

Karen, you’re friend is certainly in a good position to file accurate tax returns since he has good records. Having good records is always an excellent starting point, and makes the process go a lot quicker. In your friend’s situation, I would recommend the following steps:
1. File an extension for 2011. There’s no use in hurrying to meet the April deadline for just one year.
2. Compile a summary of his income history, by year. Put all his contract work (1099s) in one category and all his “family business income” in another category. This separation is going to be helpful in a later step.
3. Take a close look at whether your friend is an employee or an independent contractor with respect to the family business. If the general guidelines in that article to which I linked don’t result in a definitive answer, you can also review the so-called 20-factor test.
4. Discuss the employee vs. independent contractor situation with the people running the family business and see what they plan to do, if anything, in the immediate future about this specific issue, and discuss whether there’s going to be any repercussions if your friend goes ahead and files one way or the other.
5. File, if at all possible, the year 2008 tax return on or before April 15, 2012. Yes, I know the deadline this year is April 17th. But I’m looking at a completely different deadline, namely the 3-year deadline for getting earnings recorded for Social Security purposes. If your friend misses this deadline, his earnings (whether as wages or net earnings from self-employment) aren’t going to get added to his earnings history for 2008. This could, potentially, impact his retirement or disability benefits in the future.
6. For all years, your friend is going to owe because there’s never been any withholding. That’s okay. He can set up a payment plan with the IRS. For now, save that process for a later step. The more important thing right now is to start filing returns. For all years, your friend is going to owe both income tax and Social Security tax and Medicare tax on his earnings. If he’s an employee (step 3), he’ll calculate his share of Social Security and Medicare (7.65% combined) and include that on his tax return by filling out Form 8919 and Form SS-8. Be aware that filing these forms with the IRS will trigger repercussions for the family business. If he’s an independent contractor (from step 3), then he’ll calculate the full amount of Social Security and Medicare taxes (15.3%) and include that on his tax return by filling out Schedules C and SE.
7. After filing 2008 return by April 15, then start filing tax returns for 2009, 2010 and 2011. Try to get those in relatively soon, say within a couple months or so. The biggest tax decision is really the employee vs. contractor issue. The rest of the work is largely about tallying numbers and filling out forms and getting them mailed in.
8. After those four years of tax returns have been mailed in, call the IRS and ask to set up a payment plan. They might say yes, or they might say he needs to first file all his tax returns. Filing all tax returns is a prerequisite for setting up a payment plan. If the IRS is satisfied with the filing history, they could go ahead and begin setting up a payment arrangement. If not, you’ll know that your friend will need to go and file all the other missing years. If you need more time, ask the IRS. They can put a short-term hold on collections activity while you get the other tax returns in.
9. Set up a payment plan. There are many options here. Start with an analysis of whether the IRS’s streamlined installment agreement will be affordable. This is a 72-month payment plan with an interest rate of approximately 9%. Use a loan calculator to figure out the monthly payments by assuming that the starting loan balance is the sum total of all his taxes plus an extra 25% on top for late penalties. These are rough numbers only, but it will give you a ballpark figure for seeing if the monthly payments will be sustainable.
10. If that’s going to work, fine. Set that up and your project is done. If that standard payment plan isn’t going to work, they you’ll need to take a hard and honest look at what will be affordable. Prepare a budget of income and expenses and see what type of payment would be sustainable. Then present the results of your analysis to the IRS on Form 433-F, and negotiate the payment plan terms.

At any step along the way, you can seek assistance from a certified public accountant or enrolled agent or attorney. These professionals are permitted to represent taxpayers before the IRS and so can help you work through any problems and present solutions to the IRS that they might find acceptable. The more work you do, the easier it will be to talk and collaborate with your tax professional, as you’ll understand where you’re stuck and where you’re at on your project plan.

I haven’t addressed the issues relating to the family business. Those are, roughly, the same issues that your friend faces. Except the issues are bigger and more serious. But the same rules and the same process still applies. The business will go through the same process I outlined above, except there’s going to be more work involved to handle payroll, income tax, sales tax and any other filings. Getting organized first, and developing a project plan, and developing a financial plan for the business is going to be a top priority. The business should be working closely with a CPA and an attorney so that legal issues and financial issues are addressed in a comprehensive manner.

March 31, 2012 at 12:44 am
(217) Karen says:

Thank you so much for sharing your expertise. I will pass this information along asap!

April 6, 2012 at 2:06 pm
(218) sheri says:

i have been a 1099 independant contractor from 2003 to 2009. I never filed my taxes that entire time. May 2011 i got married and my wife and i jointly filed our taxes for 2011. Couple weeks later we received a letter stating that we owed $80,000. What do i do at this point? Its an unaffordable debt for us, and i dont feel like my new wife should be held responsible. Everything is in my wifes name, as she had owned it prior to us meeting. Will she be held legally responsible? will i have to pay all of this expense back? Can i possibly file the taxes, then file bankruptcy on it? Help!

May 21, 2012 at 10:41 pm
(219) Ann1411 says:

Hi, we had filed back taxes for 02,03,04,05 back a few yrs ago, IRS did put Tax liens on us for those years. We had a meeting with IRS but due to our income being so low at time we were unable to pay anything and never heard from them again. We filed on time from then on and had refunds that were applied to the old balances… fast forward to 2011. We adopted a sibling group of 3. We file our 2011 taxes and HUGE surprise get a $47,000 refund. I call IRS and ask what our current Tax liablity is they say total owed is $55,000. Now my question…….will they apply the refund to the oldest taxes due? I ask because I recieved a letter today from them saying that they only applied $6 to the 2002 tax (the oldest yr we owed). But statement saying we still owe $ 4300 for 2002….Wondering where the other $40K went.

May 28, 2012 at 11:12 pm
(220) William Perez says:

The IRS should apply your refund to your outstanding balances owed in the order of the oldest assessed year first, followed by the next oldest assessed year, and so forth. It takes some time for this to work out. I’d wait about another four weeks and then check on the remaining balances owed for each year.

May 24, 2012 at 9:33 pm
(221) dena says:

My husband and I owe back taxes from year ending 2003. We had our taxes prepared but they were never filed because we didn’t agree with what the tax preparer said we owed. Unfortunately, we both lost our jobs and our house and we ended up being homeless for awhile and never got our paperwork back from the tax preparer. The paperwork we lost was employment W2′s, 401K distribution – cash out, escrow papers regarding the sale of our house, business set up information and all our other information i.e. taxes and insurance, etc. The tax preparer ran his business out of his home and was pretty old when we last saw him. We have since moved to another state. I have tried calling and writing – but have not received any response.

We were conned by a “smooth talker” into selling our house and ended up selling below market as well as turning over a lot of cash after the sale and ended up being evicted. We found out after that the Escrow company and the Broker did not have licenses and they both will not talk to us. The Escrow company told us our paperwork was lost.
I have since started working and I received a Final Notice of Intent to Levy and Notice of your Right to a Hearing from the IRS. I would like to file a “Hardship Status” with the IRS because I am the only one working. My husband was injured 3 years ago while working and has not worked since and receives no disability. I don’t know how to proceed to file the 2003 taxes with no paperwork. I have no money to retain a lawyer.
I appreciate any thoughts you have. Thank you.

May 28, 2012 at 11:05 pm
(222) William Perez says:

Dena, see if you qualify for help from a local income tax clinic. If so, the professionals at the clinic can help you resolve your tax problems. You can also get copies of some of your tax documents from the IRS. Fill out Form 4506-T either mail this to the IRS or take this to your local Taxpayer Assistance Center and they will print this out for you. You have two problems: you’ll need to make some sort of plan for handling the IRS’s collections department, and you’ll need a separate plan for filing your tax returns. Normally, the IRS will expect you to file the tax returns first, and sometimes they can hold off on their collections activity for a short period of time so that you can get your tax returns filed. A tax professional can analyze the specifics of your situation in more detail and advise you how to proceed.

May 29, 2012 at 5:42 pm
(223) sstein says:

First, please let me thank you for some of the peace of mind this article (and several of your others) has brought to me. I was hoping for any insight on my issue? We have not filed, nor paid, in several years and are in the porcess of filing now with the help of a tax professional. We will owe a large amount and, because of income, will not qualify for an offer in compromise. My husband has a set salary each month, paid semi monthly, along with a percentage paid of accounts received, paid monthly, The percentage can fluctuate wildly (sometimes by $3-4000 a month or more and also varies from year to year) ) and it is an amount over which he has no control. Will the IRS calculate the huge amount we will pay each month on the set salary only or will there be some sort of averaging for the percentage to include that also? If averaging the percentage, there are some months where that could create a huge financial hardship, thus creating a vicious circle until the next large percenatge amount comes in, by which time there is a likelihood we will have had to default as you cannot pay with what you do not have. We will set aside money from a large percentage period, but that will only last so long before default. While we are working with a tax professional, I am trying to find out as much as I can on my own before adding any more billing charges to our bill with him. I want to try and start looking at how we are going to handle such a large payment amount each month. Thank you for any imnformation you can send my way.

July 16, 2012 at 6:39 am
(224) Marline says:

I have a question. I missed the deadline to file my taxes this year & I made about 9,000 what will the penalties be when I try to file now ?!

July 21, 2012 at 9:31 am
(225) Catea says:

Good morning,
I just came across this thread…WOW it is a long one. I was very happy to see that it is still active, as I truly appreciate the advice you are giving to people. and I had a question you might be able to help with.
I am wondering if there is a faster way to file overdue returns then certified mail?
Would it be faster to take forms to a local IRS center? Any other suggestions?
Thanks so much,
Catea

July 23, 2012 at 12:56 pm
(226) luke Cuccaro says:

I was in an insatllment agreement with IRS for 2000 through 2004
they apid 2002 brfore 2000..2000 was a larger debt owed–do I have recourse now

July 25, 2012 at 4:17 pm
(227) Catea says:

Mr Perez,
Would you please contact me. I had a couple of questions that are quite pressing.
Thank you!!
Catea

July 26, 2012 at 10:03 am
(228) Larry says:

Mr. Perez,
First, let me say that this Q&A is absolutely, positively the best information on filing back taxes anywhere on the Internet (and I’ve looked everywhere). You are doing a great service for folks at a time which is extremely stressful for them. I thank you for the information you’ve already provided.
I have lived abroad since 2003. I did not realize I needed to file taxes while abroad because I was earning much, much less than the cutoff for the foreign earned income exclusion. I thought that if you made less than the FEIE cutoff, I didn’t need to file. I know now this is not correct.
Anyway, I’m not going to owe any taxes. My question is, how many years back should I file? I need to file at least three years because I’m preparing to apply for a green card for my wife, which requires submitting 2009, 2010, and 2011 taxes to the US Consulate. I read that the IRS computers only go back six years. Will six years be sufficient?
Thanks for your time.

August 1, 2012 at 12:37 am
(229) Tami says:

Hi William,

My husband and I got married in December 2011. We just learned that he has an unpaid Federal tax debt of about $42K. We learned this because they apparently filed a lien or levy against all of his bank accounts, including our joint account used to pay our mortgage and other bills. It was just bled completely dry today, the day before our mortgage and bills are due. More than half of that money was mine, so I’m pretty insulted. :/

While we will be working with our accountant first thing tomorrow to work on resolving this debt, I’m wondering about what exposure I now face as a spouse, even though we were not married then, what liablity do I have today? Should we do anything to protect any assets he may have in his name or in both of our names so that we can keep them lien free? We own a home, a motorcycle and 2 cars. My name is on all of them. Can I assume the property in my name to protect ourselves? Can they eventually attach the debt to my accounts and assets?

Thank you!

I’m a bit stressed out!

August 1, 2012 at 4:47 pm
(230) William Perez says:

Tami, I’m sorry to hear about the bank levy. The IRS may be willing to release those funds back to you if you can resolve the issue fairly quickly. Typical resolutions are either to be placed in a hardship status (known as “currently not collectible” in IRS jargon) or by setting up a payment plan (called an “installment agreement”). If either of those two resolutions are agreed to mutually by the IRS and you & your husband, then it’s possible for some or all of the levied funds to be re-deposited back into your account. Your accountant can help you evaluate which options you qualify for and can talk to the IRS on your behalf to reach a mutually acceptable solution.

That outlines, very briefly, your next steps. Now to address your questions.

As far as your financial responsibility (your liability) for the taxes due, the general principles can be outlined as follows. Each spouse is responsible for 100% of the tax on a jointly-filed tax return. So if you filed jointly for 2011, then both you and your husband are each 100% responsible for that tax and any remainder amount that is unpaid. This is referred to as joint and several liability for the tax. If you filed separately for 2011, then you yourself are responsible only for the tax shown on your return, and your husband is responsible solely for the tax shown on his return. If your 2011 tax return has not yet been filed, it might be advantageous to file separately. Your accountant can help you analyze that decision. For the taxes related to previous years before you were married, only your husband is responsible for those unpaid taxes. However, the IRS can collect, by force if necessary, the unpaid tax from any and all assets owned by your husband. If you live in a community property state, both spouses are considered to own each other’s assets 50-50. In a separate property state, each spouse owns only his or her own funds. With commingled funds in jointly titled accounts, the IRS has no way of knowing how much of the assets belong to each spouse, so the IRS will take everything and let the taxpayers figure out what to do next. There are ways for you to protect yourself and your assets from your husband. Your accountant can help point out various tactics you can use to shield yourself from your husband’s debts. The specifics depends on which state you live in, as the rules differ by state.

By far the best protection (strictly from a tax perspective, mind you) is to set up a resolution with the IRS. For example, if you set up a payment plan with the IRS, that plan is a contract that says (in so many words) that the IRS won’t forcibly confiscate your cash out of your bank account or paycheck as long as the payments are made on time according to the agreement. Absent a payment plan or hardship status or some other resolution, the IRS will be able to continue their enforcement activities. With a resolution, the IRS will be prevented from taking aggressive action. That preventative aspect is what will most help you protect your bank accounts and other assets.

August 8, 2012 at 3:46 pm
(231) Evelyn says:

Thank you very much for this information. I did not file taxes for 1999. I was self employed DBA [*** ***], under a franchise. I have held other jobs and kept my taxes current since then. I have not had any trouble. I have also been remarried and have filed joint with my husband and head of household and we’ve never had a problem. I don’t recal ever receiving a letter from the IRS at all. I did get some letters requesting to file from the state of VA, but since I moved all mail from VA stopped. I had some people working for me but I found they had fake social security numbers. Most of the method used for paying was in cash. I have a few checks that I used to pay a few workers in.
It has been more than 10 years, but since I didn’t file at all, I guess the statute of limitations doesn’t apply to me. Do you have any suggestions. I though about purchasing a 1999 business tax software and going from there? What’s your take on this? Thank you so much once again.

August 29, 2012 at 11:23 pm
(232) Evelyn says:

Hi William,

I was checking back to see what you might have replied to my situation. I didn’t get an answer, so I was wondering are you okay? It seems as if so many people really have benefited from all your feed back, myself included. All in all thank you so much for all that you have answered already.

September 2, 2012 at 8:37 pm
(233) William Perez says:

Hello, Evelyn, and thank you for reading and asking your question. Answering this requires some finesse. On the one hand, you are quite correct. If a return isn’t filed, then the statute of limitations never starts to run, and so the ten-year limit on collections never expires. The proper course of action is to file a tax return and figure out a payment plan if you owe. On the other hand, 1999 is a long time ago (at least when it comes to taxes). You may or may not have records from that year (such as bank statements, bills of sale, canceled checks, and so forth), so constructing a complete (or at least fairly reliable) set of books for that year may not be possible. That’s an uncomfortable place to be in, and I understand that. Since you are worried about the year 1999, I suggest you take a look at what information you do have: any W-2s, 1099s, bank statements, bookkeeping records, and so forth from that year? Do you have enough information that you could assemble a statement of income and expenses for your franchise business? Might there be reports filed with your franchise that state your sales or inventory purchases? Then, you could see if there’s enough information that a tax return could be confidently put together, and if you are unsure on this point you could ask a tax professional for assistance.

September 18, 2012 at 1:41 pm
(234) Delwyn says:

Hello William,

I had not filed taxes for 08, 09, 10 and 11. I was garnished from the state for 08. I recently filed the taxes for these years. All of the years, I should have/be getting a refund. I know the IRS does not pay out for anything over 3 years. Should I get the refunds for 08, since they had garnished my wages for them and now they have corrected information stating that a refund was due? Also, for the 09, 10 & 11 I know they say it will take approx 8 weeks, but since it is off tax season, what is the usual time it takes to process taxes? Shouldn’t it be much sooner?

Thanks…

September 25, 2012 at 9:29 am
(235) john says:

I owned my own companies, corp and 2 llc’s in 07,08,09,10, then paid as a contractor in 11 and currently in 12. In 2008 I was late on 06,07,08 taxes. in 2008/2009 my bank foreclosed on my property, because they refused to modify the balloon note. This forced us to move from Illinois to missouri. My income dropped to about 1/2 of what I was used to. My roommate was laid off and now had to move again. I was able to get my 2006 taxes filed prior to this and owed state and federal, paid the state but could not afford the federal at all. Due to collection pressure and the repo of both vehicles, we moved out of the area while still making the payment on this 3rd place. we had friends give us a place to live with no rent. we finally were able to rent a place of our own in the new area and through borrowed money and help got moved and walked away from the last purchase as our contract allowed.

I have supported my roommate completely since then, while he files for ss disability. but have unfiled returns still for years 07-12. we didnt’ fwd addresses due to collections and have had numerous attempts at lawsuits but they have been unable to serve.

I just found out the state of MO had filed a summary judgement against me for 2007 (which I lived out of state), and claim I owe 14K in taxes, which would be impossible I didn’t earn even close to enough gross to owe that much. The last amt for 06 was around $700 .

I dont’ knwo what to do, nor who to turn to. Every penny is spent on repairs of the vehicles, food, utilities and gas tryin gto finish the house before this winter. He has many medical appointments and won’t know anything until his SS hearing late this year.

Both of us owe everybody but thanks to the foreclosure and the economy the line of business that we worked in (mortgage and auto industry). Neither was ever late on bills prior to all of this mess.

thanks for any advice.

October 11, 2012 at 6:34 pm
(236) Kathline says:

My husband was incarcerated from 2005 until 2011. We just married and I did file for the extension to October 15th because his W2 hadn’t arrived. Now I am about to file for 2011. What about those years he was incarcerated? Was he required to file? He was released in April of 2011. Is there any tax break or relief for January through April for him?
I realize this article “QnA About Filing Back Taxes” was posted online in 2005 however, you have GREATLY relieved my stress and fear about dealing with our taxes. Thank you SO very much.

October 16, 2012 at 1:12 pm
(237) Stephen says:

Hi,

I have a similar question as comment number 100.
I live in Germany since my childhood and never filed taxes. Now I am getting everything ready with H&R Block, however, I want to leave for the states in a couple days. The forms will not reach the IRS yet before I arrive in the US.
Will I have trouble at the airport? What can I do to prove I will file.

Thank you in advance for taking the time to respond.
Stephen

October 21, 2012 at 2:00 pm
(238) Krista says:

We live in Rhode Island. My boyfriend has always filed his federal Taxes without ever missing a year. He works in Massachusetts and has always filed a Non-resident state return with Massachusetts. (never missing a year)
For the past 8 years or so he has NOT filed a resident return with the state of RI(where he lives, but doesn’t work…Again, he DOES file Federal and his State via Mass non-resident)
The state of RI is now running an Tax Amnesty program through November 15, 2012. We pulled all of the records afraid he may have owed these years. As it turns out, after doing a check and running the numbers for these State returns in RI, he has not owed any of the years due to the credit he received for what he filed in Massachusetts.

HOWEVER there is one year back in 2006 when he worked a part time job in RI..(in addition to his normal MA job) He made only $3000 that year working in RI and thinkins he could possibly owe for that year. Should he just let sleeping dogs lie since he hasn’t heard anything in over 6 yrs from the State re: his non filing of State return status? Or should he run the numbers for that year and if he did owe in 2006, should he Mail in this return? Did the Statute of limitations for assessing penalties begin because a Federal and A STATE (just happened to be non-resident with MA) return was filed? We need to know what the law is in this circumstance. The past 8 years he didn’t file in his resident State…never owed any of the years but possibly one year over 6 yrs ago in 2006 or 2005. HELP…

October 30, 2012 at 10:56 am
(239) Bill says:

William:

First off, great name ! My question:

I was really bad about filing and hadnt filed my 08, 09, 10 tax returns. I went and filed my 09, and 10 taxes. This was done recently, and I should have a refund for 10 and 09- I assume it will take some time to recieve the refund though.

My main question- Why do I need to file for 08? I don’t owe taxes for that year, actually I missed out on a refund. Is there any penalty for not filing ? I’m not seeing a reason I should file

November 1, 2012 at 7:25 am
(240) Mindy says:

I recently filed late returns for 08-2010 and the irs had begun to calculate our 09 taxes for us at the time i filed. They ultimately gave us a refund when i should we owed. Fast forward to trying to amend our state return for 09 and hoping for a refund there as well. I received an account transcript which shows a 766 credit which ultimitly caused the refund which was applied to a pervious year. I belive they made a error but afraid to open that can of worms. The transcript did not give me enough info to “fix” my state return so I request a tax return transcript on line and the automated # with the irs but their system says its not avilible for that year, what does that mean? If I call to talk to someone about this will it cause them to find their error or should I leave it alone and take the hit on my state taxes and just pay it and hold my breath. Also is there a time frame them have to go back and fix something?

November 1, 2012 at 7:31 am
(241) Sandy says:

Question on a state tax issue for Oregon. I recently filed returns for 07-2011 and owe about 2500, I spoke to someone over the phone that stated the penalty for not filling for 3 years in a row is a required 100%. I would have to use a credit card to pay the 2500 and no way can pay 5000 and they require payment plans to be paid back in one year. Should I consult a tax attorney to help negotiate a reduction in penalties?

November 1, 2012 at 7:47 am
(242) Sandy says:

Sandy again- I forgot to add this question. Should I pay what I think I owe before the finish processing my state returns and assessing the tax or should I wait until I recieve a bill? In a letter I received it stated penalties were assessed on unpaid taxes owed. Would it be advantageous to get ahead of it or wait it out? Thanks so much

November 5, 2012 at 6:15 pm
(243) Clint says:

William,
I have not filed taxes for going on 7 years. I’m at a lost due to how much time has gone by and what might happen. What should I do to correct all those years of non-filing?
I want to get this monkey off my back so I can move on.
Thanks for any suggestions.

December 1, 2012 at 5:58 pm
(244) Just Joe says:

Thank you very much for providing this information! This site has taken a huge weight off my shoulders.
To set up my question, you should know this:
I have not filed since either ’97 or ’98. I have those files in storage, but not with me at the moment. I have worked regular jobs (no under-the-table, no tips, no major bonuses).
My question is this:
I worked in New orleans before, during, and after Hurricane Katrina.
I did receive help from FEMA after the storm.
How do I get that information from them to file with that years’ taxes?
Thank you in advance for your time.

Joe

December 19, 2012 at 1:25 pm
(245) Hassan says:

Thank you very much for all the valuable info provided here.

I have not file for 2009,2010 and 2011.
*I lost my job on october 2009 and was back working on 01.14.10.
*I went thru a divorce the end of 2011 (divorced 12/16/2011)
*and remarried on 05/02/2012..

would any of these invents help to abate the penalties uncured on the amount owed?

January 1, 2013 at 9:11 am
(246) Tam says:

I’ve received a document from the IRS stating that I owe due to an unreported 1099-misc that I received in March. Do I have any relevant argument for a lesser payment? What are my options as far as paying this back?

January 18, 2013 at 5:55 pm
(247) kimberly k. says:

William, please help : ) I have filed ONE tax return in my entire life…back in 82′- married filing jointly ( i was seventeen)……Jump to 2002 I married my current husband…& he has not filed since 1995….. We have no records, but have both worked w-2 jobs on-off this whole time…no other income…and always claimed 0 on deductions ..We want to get this IRS mess straight now….I know we need to start by getting copies of all reported wages from IRS… But, should we start with just this year (2012) …….or this year AND the 3 previous years….(2011-2010-2009) .(in separate envelopes, of course)…or do we have to do every year: ME 1983-2012 HIM 1995-2012…I am 90% certain that had we filed in any of those years we would have had a refund…Also is it better to file married or seperatly for the years we are married? Thank you in advance !!

January 25, 2013 at 7:13 am
(248) NT says:

Hi,
My friend’s father wants to refund his taxes (1992-1996).
He is not a US citizen. He is Macedonian, who have live and worked in US during this years.
The reason he didn’t applied for the taxes through years is that he didn’t knew it, that he can refund them. He have all documents, required for the procedure.
Please advice if it is possible and if yes how/where he can start the procedure. He is leaving in Macedonia, Europe since his return from the States (1996).

I will be very grateful for your answer!

Thanks in advance!

Regards from Europe :)
Natasha

January 28, 2013 at 9:31 pm
(249) Marty says:

Broker used my husbands name against & without authorization or knowledge until the day that 2 homes were going to close escrow that he told my husband that they decided to help my husbands credit by buying these homes under his name. My husband of course was shocked but felt threatened that I would lose my job especially since I was the only one working. They assured us having their tax specialist whom was an ex IRS officer handle the tax preparation and that they would pay any taxes due on the gains but more than likely would get a refund and that he could keep it. My brokers kept a few files out of my reach or admin. It wasn’t until I boxed to store all files away that I discovered how my brokers scammed FNMA. From submitting ghost tenants for “$4Keys” to manipulating the BPO to list them under value and he purchase them under “straw buyers” then coincidentally props were vandalized/stripped and submitted over-inflated renovation bids from a company that was there’s but had it under the stepson’s name. In these 2 homes they collected 11K &13k on top of the + $4keys

January 28, 2013 at 9:33 pm
(250) Marty says:

. And Close Escrow with the NEW Homeowner with a day or two from closing the original sale. They had planned and methodically befriended the FNMA Rep. took her on vacations , 2 loan officers , a title rep and escrow. Upon discovering what they were up to I didn’t work their much longer. I could not be at peace and preferred poverty over anything to do with them anymore. Any attempt request or calls were unanswered. We had no records of absolutely anything and were told by an accountant that we can go to jail for these brokers using my name. In 1999 my husband wage garnishment was for $18,540.00. We continued to call but they had moved and left the real estate firm. We had no contact #’s that worked nor idea where they lived. $5086.00 in garnishments later, I was able to pull an address and we knocked on the door and left the message that I was going to go to FNMA to provide them with proof of what they did. Miraculously their tax man scheduled us Nov’99. We were so relieved that his wages were no longer going to be garnished. We are still waiting for my husband to get reimbursed but this morning I browsed at these taxes and I noticed these figures: Wages $322.00 Other Gains: 19,579.00. Total income of 19,901.00 and a IRS balance due of $3,573.00 + $587 due to Franchise Tax. Do these #’s make sense or was this another foot with a boot?

January 28, 2013 at 10:19 pm
(251) William Perez says:

Marty, your questions are best addressed by an attorney.

January 29, 2013 at 6:14 pm
(252) Chloe says:

William – what a great website – you are so kind to explain to each person how to handle their situation. In reading over other questions/posts, I understand the 3 year limit to receive a refund; however, here’s my question: in April 2008, we filed an extension which would make our return due in Oct 2008 I believe. We didn’t actually send in until Oct 2012, 3 years from our extension. Are we still ineligible to receive the refund due? If not, it’s our own fault, and we have to accept – just wanted to be absolutely sure. Thanks in advance!

January 30, 2013 at 2:38 pm
(253) Lesa says:

Hello William I would really appreciate as much advice that you can give concerning my late taxes. In 2005 I started exotic dancing because my car broke down. I had been supporting myself since I was 16 because I have abusive parents. At the time I was working a factory job and putting myself through night school when my car broke down and I lost my ride to work and school.

I started dancing in 2005-2007 in South Carolina. My boss told me not to file and to be honest I was kinda ignorant about how to go about filing taxes considering I had only at the time worked as a cashier and had a factory job before. So I was completely confused about how to do my taxes working on cash tips. There is no record of the money I made in those years. I did not receive a 1099 or a w2. Should I file something for the years of 2005-2007? I didn’t keep a record of what I made or any tax right offs.

From 2008-aug 2012 I lived in Chicago still dancing. 2008-2010 I got a paycheck and made tips. The club also had proof of all the money that the customers would put on their credit/debit card. The tips I wrote down but should I claim all of the cash?

2011-2012 No paycheck. Just tips….

January 30, 2013 at 2:39 pm
(254) Lesa says:

Continued:

I didn’t file for a few years because to be honest I had no idea about how to go about filing stripper tax and because I walked into a H&R block in Chicago and the lady was really rude to me because of the job I was doing. So I walked out with my taxes because I didn’t trust that tax office after that. Then a friend of mine recommended her friend to do my late taxes. I gave him all of my tax info w2 and 1099′s and it has been a year or so and I still haven’t heard from the IRS. I called the Chicago tax office and they say they have no record of me. So I am thinking that he just didn’t bother to do them or made a mistake. I tried calling him but he changed his number. I am hoping it is not tax fraud! I was wondering if the best way to collect copies of my w2 and 1099 is to contact the place I used to work???? Also I was wondering if you can tell me the best way to go about this situation so that I do not get audited??? At this point I don’t even care if I have penalties or fees I just want to get my taxes caught up and all paid for so that I can not have the worry of being audited and so that I can put my dancing days in the past :) ….Any advice would be great! Thanks much, Lesa

January 31, 2013 at 6:20 am
(255) Danny says:

Hey william the very helpful guy! I have worked a contracting job and haven’t filed my 2010 and 2011 1099. I will b filing my 2012 taxes on time and i was wondering if maybe i will get a refund this year. I was going to submit my past tax years afteri prepare my 2012. Just wanted to know your take on that. I see that you haven’t left any advice in a whil, but i really hope your able to help me out. Plz and thx in advance.

January 31, 2013 at 8:21 pm
(256) Amanda says:

Hello :-) I got married last year and realized my husband hasn’t filed for the last 6 years. I was wondering if I can file 2012 jointly before filing all his other taxes. And if so would the IRS withhold our return due to him not filing for prior years……

February 6, 2013 at 1:36 pm
(257) Evelyn says:

Hi can you tell me where I can find the forms or software for PA state taxes for years 2008-2011? Thanks for your help! Also one more thing Can I file 2012(this years state taxes) before I file the past due ones?? Will it effect anything??

February 9, 2013 at 12:14 am
(258) Sashi says:

Hi, I would like to know how many years usually IRS go back for tax frauds when someone apply for green card?
Thanks

February 12, 2013 at 10:55 pm
(259) Mark says:

My 85 yr old mother is now living near me in SC from PA. My dad passed in 2009. They lived their entire life in Philadelphia Pa. I have no idea if my mom has filed taxes in 2009, 2010, 2011, or 2012. Since my dad was alive in 2008, I’m going to assume that he filed taxes for 2008. My dad usually went to a family relative who did the taxes for them. My mother is really in the dark when it comes to money and finances, pension, social security etc. My dad handled everything. My mom also has slight dementia and couldn’t give me an answer on taxes when I asked her about it. Two years ago she fell in her house, and was in the hospital for 2 weeks, then in a rehab facility for 6 months, and then in an assisted living facility. sometime in 2012 around June, she moved from NJ to SC near me where I can take care of her. My brother, who is the eldest son, took it upon himself to sell my parents home in 2012, to pay for the assisted living facility which was around 5000 a month. At that rate, she would only have had enough money to pay for about 16 months of rent at the assisted living facility. So before all the proceeds from the sale of her home were depleted, I got her to move down here to SC. The house sold for around 110,000. She had about 40,000 in savings before that. The assisted living place depleted all of her savings, and then ate away at the proceeds from her house.

How do I start to make sense of her taxes? How can I find out when the last year was that she filed taxes? Does she even have to file? She’s 85, and gets Social Security, and my dads pension which is shy of 1000 a month. Whats the worst that could happen if she never ever files income taxes again? Is there any way the irs could come after me for my mother owing money?

February 13, 2013 at 7:06 pm
(260) thehonestone3 says:

I was wanting to know if once the IRS receive the back taxes 2010 and 2011 will the release our refund that’s due to us this current year or will they have to review it first.

February 24, 2013 at 11:43 pm
(261) Missy says:

My husband and I were separated, but still married, when he passed away in September of last year. Upon going through some of his files, it became clear that he had made some expensive mistakes when filing his taxes for the two previous years.I took the files to an accountant and they amended his returns. The refund from one of them was enough to satisfy the child support arrears that he had managed to accumulate. I understand that the refund will be intercepted for that purpose. My questions are these:

1) How long should it take for the balance of that refund, the refund from the second year, and the refund for the current year (which was just mailed last week) to be issued.

And

2) Does the 4 week refund window for paper filing still apply for a deceased taxpayer?

February 26, 2013 at 11:47 am
(262) AZ Newlywed says:

I got married the end of last year. As I am preparing to file a joint return, my husband told me he hasn’t filed in years. If we file jointly, and it turns out he owes from previous years, will our joint refund be withheld? Should we try and catch up on all of his previous non-filed years first or just file our joint return and then work on his past returns?

March 7, 2013 at 5:24 pm
(263) Lee says:

I ran a business from 1997 to 2011 and never filed ANY taxes or tax forms. I received a few letters here and there about not receiving a return and for 941 but that is all and nothing since 2008. I want to file something and make sure they don’t come after me first. I wanted to know how to move forward. I was considering using tax assistance companies to help me file back taxes and assist with OIC or installment plan etc. Is this worth the time or the money to deal with them?

March 8, 2013 at 8:34 pm
(264) Sheila says:

What id you were not able to file your relocation allowance 2009?are you still able to file it this year?

March 10, 2013 at 4:24 pm
(265) amunnyisfunny says:

Hello William, I realize this is an older post but I hope you still see these messages! I have a question about filing back taxes to an individual state (Louisiana in this case). For the years of 2009 and 2010 I filed federal income tax returns but failed to file state returns. In 2010 a portion of my federal return was witheld, explained that it was applied to a balance owed to state. In 2011, a portion of my state return was witheld, explained applied to a balance owed to state. Now, in 2013, I am receiving mail from the LDR quoting a certain amount that I owe from 2010. No explanation of amount, just stating that it is owed and that if not paid within 60 days will be seized. I filed a petition in accordance with the instructions on the notice, however, weeks later I am still receiving additional notices, alternately giving me either 30 or 60 days to pay the balance. I do believe that I have already covered this balance, given the amounts witheld from my 2010 federal return and 2011 state return. I do not however have any documentation to prove this. So, where and how can I go about proving what I believe to be true. I cannot pay this balance knowing that I ave actually already paid it, however I also cannot expect the LDR to just take my word for it. What to do. Please help!

March 14, 2013 at 7:16 pm
(266) shelly says:

Please help!!! My husband and I have been filing our taxes together for years, every year we get at least some kind of a refund. This year (2012) we have been waiting and have received nothing yet. My husband called and the irs worker told him that there was a mistake on our taxes back in 1995 and with interest, we owe $6000, the company that used to do our taxes have since then closed due to both of them passing. What if anything can we do??

March 21, 2013 at 9:03 pm
(267) William Perez says:

Shelly, the process will be to first figure out what this problem is from 1995.

March 24, 2013 at 6:44 pm
(268) JB says:

Very nice of you to respond to all these people. I’ll keep my question short in hopes you respond to mine as well. :)

Like some of the others I’m 9 years behind on my taxes. I’m self employed and have done a decent job of getting my receipts and other vital documents together. My question is, should I file through a good cpa or should I contact one of the agencies I keep hearing on the radio/tv to help me reach a settlement on paying the back taxes and penalties?

Best to you and yours.
JB

March 27, 2013 at 4:10 pm
(269) William Perez says:

JB, generally speaking I would recommend a tax professional who has either the certified public accountant or the enrolled agent credential, as these professionals are able to represent your interests before the Internal Revenue Service. Further, some CPA’s and EA’s have earned a further specialty credential of being a fellow of the National Tax Practice Institute. This specialty credential covers topics such as late filing and other types of projects that involve representing taxpayers. If there’s a fellow in your area, that’s probably a good place to start in looking for some one to help you.

March 30, 2013 at 4:36 pm
(270) Kevin says:

Hi William,

It’s great to see a man of your experience helping those who need it here.

I tried running a small consulting business for 3 years and didn’t file or pay taxes between 09-11. Since last June, I landed a stable job and finally have my finances somewhat stable.

I don’t have the best records over these 3 years, as for expenses, and I also have a failed investment attempt during that time. Should I seek a professional or is the filing something I can do on my own with software? I’m pretty embarrassed to have someone else looking over all of this, but I’m concerned about levies, garnishments, etc. and want to keep those things from happening.

April 8, 2013 at 11:17 pm
(271) Bernadette says:

Thank you for this article!

April 9, 2013 at 12:32 am
(272) William Perez says:

You’re welcome.

April 10, 2013 at 5:10 pm
(273) jones says:

I need to file back taxes for 2010 to 2012 can you tell me how I can go about doing this. Also I don’t have any of my w2 from those years how can I get this information? Thanks

April 10, 2013 at 7:52 pm
(274) William Perez says:

As for obtaining W-2s from previous years, there’s some tips in the article on missing tax documents. For an overview see the article on filing a late return.

April 15, 2013 at 1:32 pm
(275) Beth says:

Hi William – I found your forum and need some serious help. I am so scared that I cannot sleep and I don’t know what to do. I have not filed my 2011 and 2012 Michigan taxes and owe about $1000 total. We can’t pay it, my husband pays a huge amount every month for child support and I have no income because I am a stay at home Mom with an Autistic son. We have no credit cars because we filed bankruptcy in 2012. I don’t know what to do. Please help me!

May 9, 2013 at 4:57 am
(276) JaSan says:

As many have said, The world needs more people like you. Thank you!

I have been living abroad since Feb 2005. I filed and got my 2005 refund (more than I paid in). After that I have no income, I havebeen a student or mom since then. my husband (since 2007) is not US citizen and pays taxes here in his own country. But I have been told I need to file US taxes even if I have no income, or I may have issues with my passport in the future. When i am officially asked I still claim residency at my parents’ house (in MN) because I travel frequently and it is my best home base (most years I have been there 1-2 months out of the year)

I stopped filing cause I was actually receiving refunds I never paid in, I felt unethical. But if I HAVE to file,
1). do I still claim myself and my two children (all three of us are NOT claimed by anyone right not)- even by my husband because local tax systems don’t adjust for dependents
2). do I need to ask IRS for their transcript, I know everything is 0? Can I just fill out forms like that?

Thank you
Jaimie

May 25, 2013 at 10:21 pm
(277) ZiggyM says:

Hi William,

I filed some past due tax returns this year (2009 and 2010) along with my current 2012 return by the April 15 deadline. I had an unpaid tax bill of $1800 from my 2007 return. So I was anticipating that penalty fees would be deducted from my refund. I plan to file my 2008 (refund amount expired due to time limit) and my 2011 return (refund due) in about a month. I got notice from the IRS that almost $8600 would be kept from my pending 2010 refund (ouch!). I didn’t anticipate the fees to be that steep. I actually received my refunds for 2010 and 2012, but I haven’t heard anything concerning the 2009 filing (refund due) .

So I have two issues. Should I be concerned about the lack of notice from the IRS concerning my 2009 refund? All three returns were mailed at the same time. Can I request something in writing from the IRS showing how the penalty fees were calculated. I also need to file my state taxes from 2008-2012, which I intend to take care of by next month. Would state taxes factor into the $8600. What would you suggest that I do?

Thanks in advance!

July 21, 2013 at 4:04 am
(278) leah says:

I have failed to file for the past 4 years. I made approximately 40k a year and files exempt all 4 years. Is there a way to calculate how much I may owe back? I have already received a levy for wages (more than half of my check). I just want to make things right.

July 26, 2013 at 12:28 pm
(279) Nicole says:

Hi william,

My husband recieved a SS# last year but was working with a tax id prior to that (07-09) an ameneded for 2010 when we filed jointley, we have filed his taxes for the years he worked under his ss and wonder how long this process takes to get it transferred over to his ss I know we probably wont get anything back but need to know if we owe

August 12, 2013 at 12:20 am
(280) Al says:

Hi William,

I have not filed taxes since 2001. I am currently working in Saudi Arabia since 2001. I really want to files taxes but unfortunatelly there is no tax services office in Riyadh. I need your help/services desperately.

August 19, 2013 at 12:02 am
(281) Fidencio A. Perez says:

On April 10, I received my approval for CRSC from Department of the Army. effective date June 2003. I file my income tax for 2012. I received a letter from IRS stating that I owe 29 thousand dollars for 2003. I need help.

August 28, 2013 at 3:48 pm
(282) William Perez says:

Fidencio, please consider consulting with an enrolled agent or certified public accountant for help with your specific situation.

August 24, 2013 at 2:05 am
(283) Debbie says:

I am a US citizen and I was living and working abroad from 1998 to 2012 working for a foreign govt. I am now currently residing in the US and wanted to know what the first step I should take in filing? I have not filed anything to date and appreciate any advice

August 24, 2013 at 2:44 pm
(284) William Perez says:

Debbie, thanks for asking your question. It’s a good question too. Generally speaking, you may be eligible for the foreign earned income exclusion — which exempts the wage income up to a certain limit — from US federal taxes. Also, depending on the country where you worked, that country might have a tax treaty with the US — and some tax treaties have a provision that exempts income earned while working for a foreign government; and this is usually found in a tax treaty article titled “Government Service.” You may want to consult with an enrolled agent or certified public accountant who specializes in international tax to help advise you on the best way to file your US tax returns.

August 24, 2013 at 4:07 pm
(285) Debbie says:

Thank you so much for the helpful advice!

September 13, 2013 at 3:09 am
(286) Sharon says:

Hi I have not filed for 2010, 2011 and 2012. I already owed back taxes ( thanks to filing jointly. never ever have I owed taxes until filing with my ex-husband who obv hasnt reported any income since 2008) An old roommate told me last night that an IRS officer came to her house looking for me. As with everyone else one thing or another has kept me from filing along with OMG I didnt file last year now what is going to happen. I have filed and never owed a dime for over 20yrs. Now it is so overwhelming I just dont know where to start. I had a garnishment with previous employer but I remarried and relocated, obv I quit that job. I know that garn is voided now. It appears I should file unfiled years right away but my question is should I then contact IRS or just hire an attorney to sort this out. I know you have answered this numerous times but I dont think any have mentioned the IRS Officer. is that alone a game changer. Thank you so much for your help.

September 13, 2013 at 12:39 pm
(287) William Perez says:

Sharon, you’re asking really good questions! Your path forward consists of filing your returns and then setting up some sort of arrangement to handle any outstanding taxes. There’s lots of details to master. For example, you may want to file separately (if you were married in any of those years). Any refunds you have will be kept by the IRS to pay down taxes from previous years. Depending on your situation, you may qualify for Innocent Spouse Relief or to have the IRS separate the outstanding taxes from when you filed jointly with your ex-husband. An enrolled agent or certified public accountant can assist you with preparing the returns and advising you on payment options and innocent spouse. They can also let you know if hiring an attorney will be needed to deal with the IRS agent. (First, we’d need to find out what the agent is looking for, then you can figure out how to deal with the agent.) Once you have a payment arrangement set up with the IRS, there won’t be any further garnishments or levies. One final note: some enrolled agents and CPAs specialize in this kind of work, which is called “representation.” Tax professionals who specialize in representation often receive training from the National Tax Practice Institute fellowship program.

September 17, 2013 at 7:29 am
(288) Pat says:

Hi William,

Been living overseas for 20 years. Have not filed in all those years. Last 7 years engaged as an independent contractor for American company.. Recently been offered a position with an American company (would still be woking abroad). If I take this position and once agin start filing, I assume it throws up a red flag to the IRS about last 20 years. Any advice of how I can be ahead of the curve so to speak, and start cleaning up my past would be much appreciated.

Cheers,
Pat

September 21, 2013 at 11:05 am
(289) Janice says:

William,
I am helping my adult children with their father’s estate (my ex husband many years ago). He has not filed tax returns for 10 years. He was sick for many of these years. His estate consists of $10,000 cash and a condo worth $40,000 that needs repairs. The $10,000 will not cover costs of administration and all back taxes (need $3000 more). Questions are: 1) How do we apportion the remainder of the $10,000 to tax years owed, and 2) Will the IRS require selling the condo to pay the remaining balance of the taxes or will it put a lien on it?
Thanks!

November 8, 2013 at 2:08 pm
(290) Help! says:

Dear William,

In approx 2003 my boyfriend recieved a letter from the IRS that he owed taxes from Gambling winnings. He was young & got caught up in a scam where he was putting down everybody’s bets in his name, not realizing he would be liable for taxes. He never paid, never contacted the IRS. We moved out of State the following year & he has not worked since. He also has not recieved anything since. We would like to get married, but I’m concerned about the IRS. Should we contact the IRS to see what he owes or should we contact a lawyer. He’s concerned about going to jail. I think it needs to be figured out so he isn’t hiding anymore. Any advice you can give will be much appreciated! Thank you!

November 12, 2013 at 9:03 pm
(291) Shea says:

My college educated brother lives in poverty and is about to be homeless and jobless again. He has had various jobs the past years but has made probably less than 20,000 each year. He owed around 10,000 in taxes back around 1998 and because he couldn’t pay way back then he just quit filing a return. He was unemployed some of the next years and even received unemployment but never was tagged as a non filer etc. He obviously can’t afford an attorney. What steps should he take at this point to end this terrible mess. Is there a chance he could go to jail for all of this

December 21, 2013 at 12:49 am
(292) Stella says:

Hi. I hadn’t filled my 2004 tax returns. Since then, I’ve had my wages garnished and they’ve kept my refunds both state and federal since 2006 as the IRS calculated that I owed a lot of money. I filed it this year and had a refund but because of the 3 year rule I won’t be receiving it. But what of all the money they’ve already took, will they refund it? According to my account history I have a credit of about 10,000. I called customer service and was told that all my refunds from 2005-12 have been applied to my 2004 debt and so that money is considered to be a part of 2004, so they will not return it. It doesn’t sound right. Is it?

January 6, 2014 at 8:42 pm
(293) Jack says:

I lost my job at the end of 2004. I moved in with family have been living with them ever since. Have depleted my savings and maxed out my credit cards. Iíve worked small jobs here and there under the table So I havenít filed a tax return since 2004. Will I have any problems filing future tax returns if I get a job or start a business?

January 7, 2014 at 1:55 am
(294) William Perez says:

Jack, you asked a good question. Unfortunately I don’t know whether there will be any problems if you get a job or start a business. The answer depends on several factors, such as: were you required to file a return for the previous years? Does the IRS think you owe them money? Are there any federal or state tax liens filed against you? But I do know that if the IRS is looking for you, they will almost always send you a letter letting you know what they need.

What I recommend in this situation is to make an appointment with a tax professional (preferably someone experienced in filing late returns) to review all the years for which you haven’t yet filed a tax return. Look over what documents you have in your possession (such s W-2 and 1099 forms), and then make a call to the IRS to request copies of income and account transcripts, asking the IRS agent if there’s any collections activities (either in progress or pending) against you. Then, after contacting the IRS, to review the transcripts and information relayed by the agent to analyze (1) whether you need to file for a particular year, (2) whether is appears you might have a refund or balance due for each year, (3) whether there are any current or pending enforcement actions, and (4) to come up with a plan for addressing any problems that are identified. This sounds like a lot of work, but it isn’t really. It should take about a couple of hours. You can speed up the process for your tax advisor by first obtaining the income and account transcripts from a local IRS office.

I realize that contacting the IRS might make you feel nervous. That feeling is normal. Realize that at the end of the day the IRS just wants to know whether you owe them or if they owe you. If you are due a refund, you can file a return to receive that refund. If you owe the IRS, you’ll need to file a return so they know how much tax you owe, and then set up a payment plan.

January 12, 2014 at 5:06 am
(295) Sean says:

I’m in the process of filing back taxes for 2000-2004. I’ve ordered my account transcript from the IRS. They don’t seem to include all of the information. I had a part-time job the IRS doesn’t have documentation for as well as a home I was buying through owner financing. Will I have any problems filing my return when some of my documentation doesn’t appear on the account transcript.

Thanks

January 20, 2014 at 5:09 pm
(296) mark says:

what forms do I need to file for a California business 2005 ? return

January 25, 2014 at 4:16 pm
(297) jammie says:

I have a question … say someone got a student loan, received the money,spent the money on “NON school” items.. ex>SHOES,CLOTHES just random things, and not only filed taxes for them in one state,but went to another and filed there to,and has no intention on paying that loan back. She is relying on taxes again this year,and seems to think they will not touch her refund.. will they garnish it? I am curious because she seem to think she is getting all this money back and has worked maybe 3 months out of the year,, i dont even think she made enough to file?! She has it in her head though that she is getting money back. Cant she get in trouble for this?? will it pop up when she goes to file that she owes that money??

January 28, 2014 at 12:00 am
(298) christi nola says:

I dont work but my fiance and I married in december and had a baby. He is 1099 & didnt pay any money all year because we were living hand to mouth he didnt pay any money to taxes so far . Should he file? Would he get sny money back now he has 2 dependent s or wait to file till next year because we married and had the baby in December?

January 28, 2014 at 12:00 am
(299) christi nola says:

I dont work but my fiance and I married in december and had a baby. He is 1099 & didnt pay any money all year because we were living hand to mouth he didnt pay any money to taxes so far . Should he file? Would he get sny money back now he has 2 dependent s or wait to file till next year because we married and had the baby in December?

January 28, 2014 at 12:16 am
(300) Litty Arun says:

My husband worked with a software company in 2001 which stopped its operations in the US due to 9/11 issue and he had to return back to India in Nov2001. We have the w2 where the income taxes were withheld. Is there a possiblity to get the taxes withheld back as he did not spend the entire year in the US.

January 29, 2014 at 10:02 am
(301) joy says:

My BF has not filed taxes for 15 years(1998-2013) .Several jobs took out taxes but many were 1099 work.. He stopped filing when he was told he would Owe $8,000 in ’98–this was while paying child support and struggling to maintain a job sleeping/living in his car or a camper –so he freaked out and said forget it….In addition there were times he had no employment at all so he has back child support owed as well. At last report he owed back support of $10,000 but the interest and penalty brought the total to $23,000! I’m a Risk Manager and Very organized with money and investing,etc. so this situation is almost untenable to me…Having said that, I love him and want him to get on the right track…and he does too. What do you suggest for filing the late taxes and handling the back child support? He makes about 40-50K a year and lives basically paycheck to paycheck..I’m not sure what to advise..and he is terrified what opening this can of worms now will result in—but we Have to do this and get right with the IRS! PLEASE Help!!

February 1, 2014 at 8:52 pm
(302) Adrian says:

I have a 2012 tax form that never got filled and I want to fill it this year will I get anything back from that?

February 13, 2014 at 8:30 am
(303) Vivek says:

My daughter lives in Maryland and works in DC. She used live in DC in 2012 and she gave her DC address as her residence address in her office. But after she moved to Maryland in the end of 2012 she forgot to change the DC address to MD address. Later in March 2013 she changed her residence address to MD in the office. Now she got a W-2 form where it shows that she made part of the 2013 income in DC and most of the income in MD. And taxes were withheld in both DC and MD. How should I handle this? She lived in MD in all of 2013.

February 16, 2014 at 4:18 pm
(304) Erika says:

I had four W2s from last year. I only filed one so I could get a bigger refund. I plan to file those returns this year. Will I be penalized for not filing them all? Does the IRS go back and check other income and W2s from that year? Will my W2 I filed last year affect the refund from the W2s I want to file this year because they were from the same tax year?

February 23, 2014 at 5:30 pm
(305) Mark says:

I have used Turbo Tax every year from the 1990′s to the present.
In 2009, I completed my taxes on my computer as usual. My ex claimed all of our kids and as a result, I owed about $1500 to the IRS. However, I did not actually file the taxes!

Because I was dealing with lingering divorce issues, it apparently slipped my mind to actually file them. I didn’t find out until this year (2014) and it was a random thing (I was handling my parents’ succession and trying to do their taxes, and I asked the IRS representative if I had any tax issues outstanding – just in case – and he said they haven’t received my 2009 tax filing).

Well, I haven’t received any letters or communication from the IRS about it, but I want to take care of this ASAP.
I assume the IRS likely won’t accept my “I was stressed and overwhelmed with the effects of a recent divorce” excuse as valid enough to forgive late filing penalties.

What are the steps I should take, starting today? Should I print my completed return and mail it with my tax due, and let the IRS calculate any penalties/fees to be paid later, or should I estimate them myself and include that with the tax due?
Will they send me a refund if I overpaid the penalties/fees?

Thanks!

February 24, 2014 at 11:51 pm
(306) Dennis says:

Dear Mr. Perez

I have been living and working in China since 2006. I am currently going through the immigration process for my wife and have learned I need to file 3 yrs. of taxes. I am filing 2555-EZ and have no taxes due. Also I have filed FBAR’s online at the BSA e-filing website for all the years within the last 6 where bank accounts exceeded $10,000.( I have some savings but no investments). My main question is this:

Should I file for years 2010,2011,2012 using the “streamlined” program and file my 2013 regularly?

or … Should I just send all the 4 years in seperately at the same time?

All the paperwork is filled out and ready to go, just wanted to check and see if I am doing the right thing before I pull the trigger.

Since I plan on moving back to the States with my family this year can I send a change of address form with each return orjust one. I am afraid if they send it here it will get lost/stolen/ or just take longer. I would rather they send it too my parents’ house.

Thank you in advance for your time. I can’t get calling cards to work when calling toll free numbers from here so it is hard to find me information.

February 25, 2014 at 5:23 pm
(307) Tina Cox says:

I filed my ’07 and ’08 State taxes in Oct of ’13. I was notified by the State that I had substantial refunds for those two years but I would not be receiving the refunds due to the late time frames. They informed me that the refunds would go into a “surplus account” that would be applied toward any future filing if I owed anything. Unfortunately, that same day I had made payment arrangements for my 2012 taxes before I was aware of the above refunds. My account has been overdrawn and they have not been able to receive their payments every month. They are now sending a “Demand Payment Now” letters to me constantly. They do not appear to be applying anything to the money they stated would be in this so called surplus account. This whole this seems so unfair. They owe me and it’s owe well but if I owe them then they can make my life hell…Do I have any options? Please Help.

March 1, 2014 at 1:58 pm
(308) Nessun says:

Hi, I owed approx $2,000 in Fed taxes 10 years ago and at the time could not afford to pay because when my mother suddenly had a stroke, I stopped working to take care of her. She was then diagnosed with Alzheimer’s. I have been a full time caregiver for Mom for these 10 years. Mom is still going strong (physically). I may never be able to pay these taxes. Is there any way for me to have these taxes forgiven? Or if not forgiven, reduced? I still have no way to pay. I have not worked since mom became ill. We live below the poverty level on mom’s small social security check. After bills are paid, nothing is left. I will be eligible for social security in four years. It will also be a small amount (approx $750 a month according to SSA).

March 18, 2014 at 11:03 pm
(309) Setareh says:

Hello William,

I really enjoyed reading all the answers you have given to different situations. I have recently got my degree in accounting and also become a tax preparer, I’ve just started working for a debt relief company and I really enjoy my job. But I have concerns about my liability as a tax preperer, since we work only online, with client sending just copy of their W-2 or 1099 misc… and most of the self employed ones have no document and they say they had large expenses for all the past years that they are trying to file now. My boss who is an EA pressures me to sign all the returns, and I don’t want to risk the possibility of being contacted by IRS or God forbid losing my PTIN. What are exactly my liabilities as a tax preparer? If client just tells me he had big expenses for some past years, but all the documents were burnt in the fire, is it ok to go ahead and do his taxes and sign, as long as I make sure he signs and dates the tax organizer we sent them? I really appreciate any guidance. Thank you

March 21, 2014 at 8:53 pm
(310) SILAS says:

My last submission was imposed in 1995, and the settlement agreement was that there was still about 3000 U $ $, not paid and I was afraid of being arrested, henceforth started working on their own, without declarations. Still work well, do not over doque U $ $ 10,000 a year. How do I rectify my situation? I want to pay all my taxes and regularizing and live peacefully. Please answer me this is driving me crazy. Would I have an agreement to pay back everything you owe? can be arrested? the IRS did not have my current endereçao since the last statement in 1995. Please guide me.

March 25, 2014 at 10:28 pm
(311) Jim says:

Excellent information, William. I read in a post that there is a three year time period for getting your tax information into Social Security. This concerns me since I am right not filing 2010,11,12,13, and the problem is that I am planning to retire soon. Does Social Security take financial information from W-2′s, and other sources, or just filed tax returns? Also, if I get this done quickly, will they get all 3 or 4 years into their system so that I get full accounting of my income which sets how much my Social Security income would be? Thanks for some valuable information! Jim

March 28, 2014 at 5:30 pm
(312) Tim Fisher says:

I closed a construction business in 2005 and ohio att gen is trying to say in need to file FT1120 franchise tax for year 08. they want me to provide proof of company being dissolved but unfortunately i don’t have that paper work any more. any ideas

April 7, 2014 at 12:57 pm
(313) LPara (Laurie) says:

I realize there haven’t been answers to questions for a while, but am going to ask this one anyway. My son is attending college in another state and has been working for the college the entire time he’s been enrolled. His w-2 is from that state only, but I have always filed taxes for him in our state only (residing state) until this year the software asked if I wanted to file in his “college” state as well. I don’t remember ever seeing this in years past OR it looked like a suggestion and not a requirement. It turns out that for previous years we wouldn’t have had to pay the state tax in the state we reside in AND he would have gotten a refund from the state he attends college in. Is it sort of too technical and time intensive to or even possible to refile with both states to get his refunds (not to mention we paid his taxes to our residing state for the past four years). I know refunds run out after three years, but the dollar amount is substantial to us at least. What I don’t get is do I have to file for both states for the past three years?

April 8, 2014 at 3:44 am
(314) William Perez says:

Thanks for asking your question, LPara. As for whether you “have to file for both states for the past three years?,” the answer depends on the rules of each state. Each state has slightly different rules regarding how residents and nonresidents are taxed, and whether students are treated as residents or as nonresidents. So it’s not possible to give a general answer. It looks like you’ve found out that “for previous years we wouldn?t have had to pay the state tax in the state we reside in AND he would have gotten a refund from the state he attends college in.” In that situation, it sounds like the best course of action is to amend and get a full refund of taxes for the state you reside in and also file an original return to receive the refund from the state where he’s attending college. It is possible to refile — that process is called filing an amendment. It’s not particularly technical: you just prepare a new return, and then a separate amended return that shows the differences between the original and the correct return, along with an explanation of what the underlying issue is. Glad you figured this out, it sounds like you’ll benefit. Thanks for sharing your curiosity.

April 8, 2014 at 10:55 am
(315) LPara (Laurie) says:

OH! Thanks so much for your answer you have been a tremendous help and I am VERY grateful!! I will get right on it! Hope your day is much blessed!

April 9, 2014 at 10:51 am
(316) Michelle says:

Hi William,

My husband has not filed taxes in quite awhile, so we will be filing his taxes to get it all taken care of. My question is, I have always filed my taxes. Since we are able to only get a return for 3 years, would it be best to ammend all of my taxes since we have been married (2008) or just to ammend from 2010 on, to get the maximum filing benefit, or just to have him file his 2010 first seperately, before the time limit runs out? Also, would we be eligible to file for an extension since we are late filing anyway? Thank you so very much for your help. I have been searching all over the internet trying to figure out the best and most effective way to file his back taxes and your site is the first an only that actually answered my questions.

April 11, 2014 at 11:34 pm
(317) Pamela says:

After reading such a great article and almost all the comments, I decided to “man up” and call the IRS, since I haven’t filed in -Wow,okay- 20 years. I figured 2010 since that year has the 3 year deadline filing. I was also missing a W-2 and 1099 from that year. In prior years, I did not continuously work a full year and in many years did not work at all. So much, I would have probably been owed a refund every time. Also when I did work, I did receive some of the W-2′s. Anyway, I called to make the request for a transcript and I was told they do not have any information on the SS number I provided. It was a vague answer but I had changed my name (prior to the non-filing years (around í88 by usage (CA) and had given the “new” name and since I did not mention this, I thought maybe this was the issue and let it alone. I called a second time, I don’t think the guy even heard me say the (birth) name, never asking me to repeat or verify my name again throughout. He just stated, “Mamn, nothing comes up with that number at all. Is this the first time you’re filing taxes?” (In between calls, I also tried the automated service and it basically said the same thing.) What gives?. (If it matters, 4 years ago, I had called the SS office to inquire about a new card with name I’ve been known as for all this time and they had me on file. I never did pursue card.) But it still seems, if this had to do with the name confusion, the IRS would still have me on file from the number alone. I do not know what to make of this nor do I know what to do next. Any advice would be greatly appreciated! Thanks in advance.

April 12, 2014 at 1:15 pm
(318) Pat says:

Hi William,

Been living overseas for 20 years. Have not filed in all those years. Last 7 years engaged as an independent contractor for American company.. Recently been offered a position with an American company (would still be woking abroad). If I take this position and once agin start filing, I assume it throws up a red flag to the IRS about last 20 years. Any advice of how I can be ahead of the curve so to speak, and start cleaning up my past would be much appreciated.

Cheers,
Pat

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