Know Your Legal Options for When You Discover Unfiled Tax Returns

Every year you are required to file a tax return with the IRS.  Failing to do so can have numerous consequences, from penalties to criminal charges.

Learn more about what you can expect if you have unfiled tax returns, what options you have, and how a tax attorney can help.

Key Insights We Will Discuss

  • What you need to know about unfiled taxes
  • What penalties you can face for unfiled tax returns
  • What options you have to correct the issue
  • Benefits of hiring a tax attorney

Executive Summary:

  • Unfiled tax returns can result in fines and penalties from the IRS.
  • Knowingly failing to file a tax return can result in tax evasion charges.
  • A tax attorney can help determine the best option for reducing penalties and payments to the IRS.
  • Contact Ayar Law to get free, no-obligation legal advice about your tax matter at 800-571-7175

What You Need to Know About Unfiled Tax Returns

Failing to file taxes can have several effects.

First, it’s important to understand that not filing taxes doesn’t mean you are absolved from paying what you owe to the IRS.  In fact, the IRS can charge you what you owe plus interest.  You may also face other potential penalties, including criminal prosecution.

If you were owed a refund for the unfiled taxes, you may have to forfeit it.  You no longer have a right to the refund if it’s been over three years since your taxes were due.

Penalties for Unfiled Tax Returns

Failing to file your tax returns can result in several penalties, including possible criminal charges.

  • Failure to File Penalty:  The IRS will assess a penalty of 5 percent of the unpaid taxes for each month, or part of a month, that a tax return is late.  The penalty will not exceed 25 percent of your unpaid taxes.
  • Failure to Pay Penalty: If you owe money on an unfiled tax return, the IRS can assess a penalty of 0.5% of one percent for each month, or part of a month, that it’s late.  The maximum penalty the IRS will assess is 25 percent of the amount of tax that remains unpaid – from the time the return was due until it’s paid off.
  • Criminal Penalties: The IRS could potentially charge you with tax evasion if you knowingly didn’t file your taxes.  The punishment can vary depending on the severity.

How to Resolve Unfiled Taxes

If you have unfiled taxes, you have options for how to resolve the situation.  With the help of a tax attorney you can apply for the following options:

  • Installment Plan: If you owe money on your unfiled taxes, you can apply for an installment plan, which will allow you to pay the debt over a scheduled period of time, if you qualify.
  • Offer in CompromiseWith the help of an attorney, you can negotiate the payment amount you owe the IRS to settle your outstanding debt.
  • Currently Not Collectible StatusIf you can prove that you are experiencing financial hardship, the IRS will cease collection actions.  Although, interest and penalties will still continue to accrue and any tax refunds will be garnished by the IRS.

How a Tax Attorney Can Help

Having unfiled tax returns can lead to serious penalties and large fines.  A tax attorney can help you determine the best course of action for how to file the returns and lessen the penalties and can help negotiate with the IRS on your behalf.

Contact an Attorney

If you have unfiled tax returns, contact Ayar Law at 800.571.7175 to receive free, no-obligation tax advice from one of our experienced senior attorneys.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.