What to do if you have not Filed an Old Tax Return

Every year, millions of Americans complete their tax returns. But for all those who do complete their returns, there is also a small proportion of people who, for whatever reason don't file.

The bad news for those non-filers is that the Internal Revenue Service will eventually notice you haven't filed. Worse, if you owe money on your return, you will be charged significant penalties and interest payments. And if you file too late, you may not even be able to claim a refund, even if you were originally due one.

The good news is you may be able to halt or lessen many actions the IRS may be taking against you simply by filing your tax returns. Take just as much care (if not more) in filing these old returns as you would filing current ones. You may still be eligible for a refund, but even if you owe, you want to owe as little as possible, since penalties and interest payments will be higher the more you owe.

In order to make the process of filing your old tax returns as painless as possible, consider the following:

1. If your tax return is delinquent, than chances are you may also be missing your W-2, 1099 or other supporting documents you need to complete your return. Don't panic. You can get copies of this information from the IRS, simply call them and ask for your payer transcript. The IRS can mail or fax these records to you.
2. Find tax forms for the appropriate year or hire a tax professional. While you can find the returns on your own or find tax software for the corresponding year, it may require significant effort. A tax professional that specializes in filing delinquent returns is likely to have easy access to these forms.
3. Complete your tax return. Just as with current returns, you can prepare your delinquent returns yourself or have a professional prepare them. A tax professional may be able to find deductions that you may have missed otherwise. Remember, your penalties and interest payments are based on how much you owe, so if a tax preparer finds a $100 deduction you would have otherwise missed, it could translate into a savings of $150 or more.
4. Pay your tax debt or collect your refund. Interestingly, late filers are more likely than the general population to be due a refund. However, the refunds generally have to be claimed within three years of the tax return's original due date or they will be lost. Unfortunately, The IRS gives itself a much longer time.10 years.to collect on its tax debt. In fact, your penalties and interest rates will only grow in time. If you can't afford to pay what you owe, you may make arrangements with the IRS to pay. A tax professional will be well-versed in knowing your payment options.
5. Mail or drop off your returns. When it comes time to submit your return, you may want to consider dropping off your return in person at a IRS Service Center. Make sure to make a copy of your return and have an agent sign the front page so that you have proof the return was submitted. If you chose to mail your return, consider sending it by certified mail or through another service that requires a signature verifying your return was received. Note that you can not file delinquent tax return individually.

If you neglected filing an old tax return, the IRS will likely notice. But by filing your return could significantly reduce the IRS's penalties.

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