Unfiled Returns

Have unfiled tax returns? Rockwater Tax helps you get current with the IRS and minimize penalties. Speak with an Enrolled Agent for free today.

You Have Unfiled Tax Returns. Here Is What To Do.

An unfiled return is any tax year for which you were required to file a federal tax return but did not. When you do not file, the IRS may prepare a Substitute for Return (SFR) on your behalf. An SFR uses only the income information the IRS has on file and does not include deductions or credits you may be entitled to. This typically results in a higher tax liability than if you had filed yourself. The IRS also assesses failure-to-file and failure-to-pay penalties on top of the tax owed.

What Are Unfiled Returns?

Who Does This Apply To?

Anyone who has one or more years of unfiled federal tax returns. This is common among self-employed individuals, people who experienced financial hardship, those who went through major life changes, and people who simply fell behind and did not know how to catch up. There is no deadline on when you can file a late return, though the sooner you file the more options are available to you for managing the resulting balance.

Expert Insight From Rockwater Tax

Unfiled returns are one of the situations where people wait the longest and where waiting costs the most. The longer returns go unfiled, the more the IRS fills in the gaps on your behalf, and the more penalties accumulate.

What most people do not know is that the IRS treats people who come forward voluntarily more favorably than those who wait to be contacted. When we work with someone on unfiled returns, the first thing we do is pull their IRS transcript to see exactly what years are outstanding and what the IRS already has.

Sometimes the IRS has filed SFRs that significantly overstate what is owed. Filing your own return almost always results in a lower liability than what the IRS has assessed. In some cases, people who believed they had a large tax bill actually receive a refund once they file correctly. You cannot know the true number until the returns are filed.

The other thing people do not realize is that the statute of limitations on IRS collection does not begin until a return is filed. For unfiled years, the IRS can pursue the debt indefinitely. Filing starts that clock, which is another reason why acting sooner is always better.

Getting Current With the IRS

We pull your IRS transcript to identify all outstanding years and what the IRS has on file
We gather the income and deduction information needed to prepare each unfiled return
Your Enrolled Agent prepares and files all outstanding returns accurately
Once filed, we review the resulting balances and identify the best resolution path
We handle all IRS communication and monitor the process through to resolution

Need a hand?

Getting current with the IRS when you have unfiled returns can feel overwhelming, especially when you do not know where to start or how many years are involved. A Rockwater Tax Enrolled Agent can review your situation at no cost and tell you exactly what steps need to happen and in what order. There is no obligation and no pressure.

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FAQ

Q: What happens if I never file my returns?

A: The IRS can prepare a Substitute for Return on your behalf, assess taxes without your deductions, and pursue collection including liens, levies, and wage garnishment.

Q: How far back do I need to file?

A: The IRS generally requires six years of unfiled returns to be filed to bring you into compliance, though this can vary based on your specific situation.

Q: Will I owe penalties for filing late?

A: Yes. Failure-to-file and failure-to-pay penalties apply to late returns. Once you are current, there are programs to reduce or eliminate those penalties.

Q: Can I get a refund on old returns?

A: Generally, refunds are only available for returns filed within three years of the original due date. Returns filed beyond that may result in a zero refund even if one was owed.