Answering Frequently Asked Questions About Unfiled Taxes

Answering Frequently Asked Questions About Unfiled Taxes

Unfiled taxes can attract the wrath of the IRS through various collection methods and penalties. Some taxpayers miss out on payments due to unavoidable reasons, while others believe they can evade the IRS and do not pay their dues for several years. While the IRS provides a helping hand to taxpayers troubled by unavoidable issues, there are numerous penalties that can be levied against defaulters. In this blog, we answer some of the most frequently asked questions related to unfiled taxes.

What are Unfiled Taxes?

Failing to pay your taxes, file tax returns, present accurate tax or financial documents may lead to you being charged with unfiled taxes. In addition, too many cash exchanges and understating income can also get you charged with unfiled taxes. Although these unfair practices may provide taxpayers some short-term relief, they are bound to face huge consequences later on. While the first repercussion is known as fail-to-file penalty, which is 5% of the total tax due, as it is evaluated every month, this amount can continue increasing to a maximum penalty of 25%. Besides, if the IRS feels you intend to evade taxes completely, it may take severe actions to collect the dues such as tax liens, tax levies, and even start an all-out criminal investigation.

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Should You File Back Taxes Even If You Can’t Pay?

It is always advisable to get in touch with the IRS and discuss the issues you are facing rather than avoiding them. You must file back taxes even if you can’t pay them on time, as having tax dues is better than potentially getting charged for tax evasion. You can even negotiate with the IRS to reduce the due amount if you have a low Reasonable Collection Potential (RCP) and cannot pay the entire amount without undergoing a financial crisis.

What is the IRS penalty for unfiled tax returns?

The IRS always highlights one point when it comes to tax dues, i.e. the penalty for not filing is always more severe than the penalty for not being able to pay on time. The agency is readily available to help any taxpayers that are stuck in complicated situations and need some assistance with their taxes. Even if you can’t make the payments in full on time, you can explore different available payment plans and potentially negotiate for an offer in compromise.

Do You Need To File All Back Taxes Before Declaring Self Bankruptcy?

Yes. You must file all your back taxes before declaring bankruptcy to ensure the majority of your tax dues are discharged. It is important to show that you have filed taxes for the specific years you want to get the tax discharged. It has been known that unfiled tax returns always get in the way of individuals that want to get them discharged after declaring bankruptcy.

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How Can You File Old Returns Without Any Details?

Accurate details or not, the IRS wants taxpayers to always file their taxes. For individuals that don’t have accurate records, they must get in touch with an attorney who can help them retrieve the details from various places. Tax attorneys can help you get all the old 1099s and W -2s through the W&I transcript from the Internal Revenue Service and get in touch with the city assessor for any old property bills that might be needed. They can also help businesspeople create profit and loss statements using old bank account statements.

Is It Mandatory To File All Returns You’ve Missed In The Past?

You must file all your taxes for the previous 6 years to be considered a tax compliant individual. It is highly recommended to contact an IRS attorney to know if you also need to file taxes for the time before that. As the IRS has become better at determining people’s income sources, it can prepare a Substitute Filed Return (SFR) for defaulting taxpayers. Anyone that has an SFR filed against them must file returns for all the years that have been mentioned.


Unfiled tax returns attract myriad issues with the IRS and must be addressed as soon as possible. The Law Offices of Nick Nemeth has a team of some of the best IRS attorneys in Dallas that are known to provide excellent assistance dealing with various IRS-related issues. Be it unfiled tax returns or even tax investigations, our proficient experts can help you avail of the best IRS tax relief plans. Call (972) 426-2553 for free tax attorney consultation or fill out our Contact Form for general inquiries. You can also drop an email at