• August 7, 2023
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Taxpayers are required to file their tax returns once every year to document their finances and the taxes paid during the year. Some taxpayers, however, go past the due date of filing tax returns, accumulating years of unfiled tax returns and end up facing various penalties, interests, and even have to face legal consequences. If you too have non-filed tax returns and need guidance, this blog is for you. Read on to find out all you need to know about filing unfiled tax returns.

Why You Must File Unfiled Tax Returns Immediately

Negligence or inability to file a tax return, when you owe the IRS, is an invitation to trouble. Many taxpayers are unaware of the fact that an unfiled tax return is worse than filing a return and not paying the due amount. If you are unable to pay your taxes, the IRS has avenues to help you pay what you owe the agency. Not filing a tax return is a crime, and you could be severely punished by the IRS. This section gives a brief overview of the IRS tax problems that may arise for not filing a tax return.

1. Paying penalties and interest

Not filing a tax return exposes you to penalties and interest payments. If you owe taxes, two penalties you may face include:

Failure-to-file-penalty – A late penalty, which is 5 percent of the total tax due, is imposed when you do not file a return. The penalty grows for every full or partial month you don’t file your taxes, and can grow to 25 percent.

Failure-to-pay-penalty – When you don’t pay outstanding taxes, the IRS imposes a penalty of 0.5 percent of what you owe.

The IRS also charges interest on unpaid taxes, which is between 3 and 10 percent, on a quarterly basis.

2. Loss of refund and other tax benefits

The IRS gives you a time period of three years to file returns to claim a refund. If you don’t file the tax in time, consider any money owed to you by the IRS lost. The same time limit is applicable when taxpayers want to claim a tax credit. If you don’t file a return, you cannot claim the credit in later tax years. Self-employed individuals do not get any disability benefit or social security retirement if they don’t file their returns.

3. A substitute return being filed on your behalf

Another IRS tax problem that may arise if you do not file a return is that the IRS might file a substitute return using your 1099 or W2s forms. While you may think of a substitute return as relief from the hassles of filing tax, it eventually costs you more in the long run. The reason being, when a substitute return is filed, the taxpayer gets one exemption and standard deduction. If you qualify for a tax credit, have a substantial amount of itemized expenses, or dependents, none of them would be considered as a waiver, which will reflect in the form of an exaggerated tax liability.

4. Face collection actions

If the IRS performs an assessment of the substitute return, you are close to facing collection actions. The type of enforcement depends on the amount you owe the IRS and circumstances that led to non-filing of your tax return. The IRS may seize your assets, including bank accounts, home, vehicle, or other personal property, place a lien against your property, or turn the issue into a criminal case. If the IRS takes hold of your assets, SSI, child support payments, and disability benefits are exempt from seizure.

The IRS has an Information Returns Program (IRP), a computer system, to match W-2 wage statements with the 1099 income reports of employers. If the system doesn’t find a match with the 1099 report, it automatically starts Taxpayer Delinquency Investigations to generate notices to the last known address. If there is no response, the IRS contacts the taxpayer, requesting them to file the unfiled tax return within 30 days. The IRS expects every taxpayer to file their returns and pay any amounts owed to the agency by the 15th of April every year. You may request the IRS to extend the deadline for a few months, or consult an attorney for assistance. Failure or negligence to file a return can cause financial distress and the IRS may consider you a criminal non-filer, which has legal consequences.

Must Read: 6 Must-Know Facts about Penalties on Late Filing and Late Payments

Ways to Settle Your Unfiled Tax Debt

If you want to file and settle unfiled tax returns with the IRS, consult an experienced IRS tax settlement attorney at the Law Offices of Nick Nemeth. We have a team of reputable IRS tax relief attorneys who have successfully helped many taxpayers settle their IRS debts. Continuing the discussion, this blog covers some of the ways to settle unfiled tax returns. Take a look.

1. Offer in Compromise

If you owe the IRS taxes more than you can afford to pay, you may be eligible to settle the debt for an amount less than the actual amount owed. In such cases, you need to apply for an Offer in Compromise (OIC) after checking your eligibility. OIC is a payment plan that requires a taxpayer to pay either a lump sum amount or follow a short term payment plan. Schedule a consultation with one of our tax attorneys to check whether you qualify for OIC.

2. Installment Agreement

Under the Installment Agreement provision, the IRS allows financially-distressed taxpayers to pay their outstanding debts through monthly installments over a stipulated period. If a taxpayer meets the minimum requirements and the IRS is convinced with their reasoning, it would stop all collection efforts, and also eliminate the possibility of wage garnishments, levies or other enforced collection methods.

3. Currently Not Collectible Status

Under the Currently Not Collectible program, the IRS releases a taxpayer from paying the unpaid taxes for a stipulated time. The IRS will declare a taxpayer is “Currently Not Collectible” and unable to pay for the stipulated time after receiving certain evidence. It is however a temporary provision that simply buys some time for taxpayers to clear their outstanding tax liabilities.

4. Tax Filing Extension

Tax filing extension helps taxpayers who are unable to file their taxes before the deadline. In such cases, taxpayers can request an extension of the deadline by filling out Form 4868. It is however important to remember that the provision only gets you an extension on the filing date; the date of payment remains the same, which is usually April 17th.

Filing Unfiled Tax Returns

Step 1: Collate all Documents and Information

Collate all the necessary information and documents you would need to file unfiled tax returns. If needed, you can request your income, account, and wage transcripts from the IRS. You must also collect information related to investments, self-employment, and other income that were not documented in the IRS file.

Step 2: Complete Filing the Return

Complete filing your tax return accurately. Review and double-check your return against the transcripts you received from the IRS. Make sure you do not miss even the smallest detail of your finances when filing unfiled tax returns.

Step 3: Hire a tax lawyer

You can also seek help for unfiled tax returns. Hiring a tax lawyer to deal with different tax issues is the ideal way to avoid potential tax-related issues. Tax professionals keep tabs on important dates and maintain an updated record of your financial documents. Moreover, they can also guide you on how to tackle other IRS tax-related issues, including tax liens, levies, or other similar problems.

Need Help with Unfiled Tax Returns? Contact Us!

Filing unfiled returns correctly is essential to avoid penalties, interests, and legal consequences. The ideal way to deal with any small or big tax-related issue is seeking professional help. Speak with one of the IRS tax lawyers at The Law office of Nick Nemeth in Dallas, Texas to get professional help with all kinds of IRS tax problems, including helping you out in filing unfiled tax returns. To discuss your tax problems, simply call (972) 426-2991 or fill out our contact form, and we will contact you shortly.

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What Our Clients Have to Say

Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
Jason WinkleJason Winkle
18:44 02 May 24
Jaime Flores was very friendly, professional, and knowledgeable. She gave me some very valuable information which helped guide me with a plan of action. The free consultation is very much appreciated.
Matthew SwigartMatthew Swigart
12:14 02 May 24
Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!
Tony PantojaTony Pantoja
12:57 09 Apr 24
Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks
Carla AtwalCarla Atwal
10:52 02 Apr 24
Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
15:56 25 Mar 24
By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.
Lucy FoyLucy Foy
06:55 19 Jan 24
My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
19:55 11 Jan 24
Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
Susan WilsonSusan Wilson
03:27 25 Jan 23
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Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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