Filing Overdue Tax Returns

Filing Overdue Tax Returns

Regardless of their ability to pay in full or not, every individual is required to file all tax returns that are due. The same procedure and location apply to filing a past-due return as they would for an on-time return.

In the event that you have received a notice, be sure to send your past-due return to the address listed on the notification.

Things you should know about IRS Tax Help

Reasons for Filing Your Past Due Return Right Away

To Stay away from penalties and interest

To reduce interest fees and late payment penalties, ensure to file your past-due return and make your payment right away.

Request for a Refund

Failure to file your return by the deadline will result in the loss of your refund. It is your responsibility to file your return and claim any withheld or anticipated tax refunds within three years after the return deadline. The right to claim tax credits, like the Earned Income Credit, is subject to the same regulations.

When records indicate that one or more income tax returns are past due, the IRS withholds refunds. Unless they have a legitimate reason for not filing a past-due return, the IRS will detain them.

Preserve Social Security Benefits

If you are self-employed and fail to file your federal income tax return, any income you generate through self-employment will not be reported to the Social Security Administration. This will make you not eligible for Social Security retirement or disability benefits.

When you Owe more Than what you Can Afford to Pay

If you are unable to make your payments, you can apply for an online payment agreement or give 800-829-1040 a call to request an extension of 60 to 120 days to settle the balance in full. You can ask for an installment agreement, or you might be eligible for an offer in compromise if you need additional time to pay.

What Happens If the Person Doesn’t Voluntarily File

Substitute Return

The IRS has the right to file a substitute return on behalf of a person who fails to file. You might not be credited on this return for any deductions and exemptions for which you may be eligible. The IRS will suggest a tax assessment in a Notice of Deficiency CP3219N with ninety days grace time to file a petition in Tax Court or your past-due tax return.

It is best to submit your tax return to take benefit of any exemptions, credits, and deductions you may be eligible for, even if the IRS files a substitute return. In most cases, the IRS will update your account with accurate numbers.

Enforcement and Collection Measures

The IRS will compile your return and issue a tax bill. If the bill is unpaid, the collection process will begin. This can involve taking steps like filing a notice of federal tax lien or having a levy placed on your bank account or earnings.

Failure to file regularly may result in further enforcement actions, including fines or criminal prosecution.

Robert M. Oliverio