The federal and state governments get very touchy when they realize that you haven’t filed tax returns as required. You can actually be put in jail for continued failure to file returns, although this doesn’t usually happen. There is no Statute of Limitations for unfiled tax returns, so tax returns can be demanded from 20 years back. Painful penalties also may be added to your debt if you owe taxes from unfiled returns.
The federal or state government usually demands that you file all back returns when your delinquency is found. If you wait more than three years to file your return, you will lose any tax refunds due to you. However you can be hit for unpaid taxes from late returns from 10 or 20 years ago.
If you don’t file the tax returns when they are demanded, IRS will calculate and file the returns for you and then demand payment. Other agencies can do the same.
It is almost never a good idea to let the IRS calculate your tax return. Their calculation will be done so that you owe the maximum tax possible. An IRS filing is not the same as a return filed by you. You can still file your tax return even if IRS did its own calculation. Taxes and penalties are almost always less once you have filed your own return.
If IRS has calculated your taxes, we can evaluate the notices you have gotten and get a correction processed if it will help you.
If you don’t file overdue state returns they will usually send you a bill and demand payment based upon the IRS calculation.
It is important to file any back returns promptly. A payment plan can usually be arranged if you can’t pay the back taxes due. We can help you through this process. Just call us at 520-722-8363.