Unfiled Tax Returns

IRS Tax Help

Why Filing Your Unfiled Tax Returns Matters.

People who do not file their returns usually fail to do so due to some traumatic occurrence in their lives. For these people, a deal can usually be made within the collection division of the IRS. However, the IRS can treat failure to file as a criminal act. Before any deal can be made with the IRS, at least the past six years returns must be filed.

If you fail to file a return(s), eventually, the IRS will file a return on your behalf based upon what has been reported under your Social Security number/Federal ID number.  In these cases, the IRS will not consider itemized deductions such as mortgage interest, state income and property taxes paid, charity contributions or medical deductions. Additionally, the IRS will not consider a change in your personal exemptions (ie child moving off to college or the birth of a child).  Basically, the IRS will give you the standard deduction with the minimum personal exemptions in order to maximize your tax liability. The Substitute for Returns (SFRs) can be replaced if a replacement return is filed timely with a letter explaining why the return is late.  However, if you let the SFR remain on your record for an extended period of time, the more difficult it will be to replace the return with a correct return.  In short, don’t wait; correct the return(s) as soon as possible.