Do you need to file Prior Years Tax Returns?

For a number of reasons, you may be faced with filing a tax return from prior years.  Often times, taxpayers find themselvesfile-prior-years-tax-returns in a viscous cycle of non filing and non-payment of tax returns.  When you owe the IRS money and worry that you cannot pay, the worst action that you can take is to not file your tax return.  You must file a tax return for every year that you earn income.

When you fail to file a tax return, you actually are facing possible criminal charges.  The IRS will automatically create a substitute return and estimate the amount that you owe.  The problem with this substitute return is that the IRS has limited information, usually only what your employer may have filed with the W2 and the return will not reflect any deductions or credits that you may have been eligible for.  When you file your tax return, the IRS will then adjust the assessment, this may result in substantial savings on your tax liability.

Owing a tax liability can be a scary premise, but there are many options available to you including negotiating an Offer in Compromise, establishing and Installment Agreement, or being declared uncollectible.  However, none of the options are available to you unless you file the return.

To file tax returns from prior years, you will need to consult with a certified tax professional to best protect your interests and have a thorough understanding of the process.  If you choose to take care of filing yourself, you certainly can do this, but you are more at risk of making a mistake or missing an important deduction or allowance that may have saved you some money.  You will also need to obtain the forms from the specific year that you need to file and you will need to have all of the supporting financial documents for the year in question.

If you have not filed tax returns for a prior year or even for a number of years, it is important that you take action immediately, preferably before the IRS contacts you with a demand for payment.  Get the help you need from a certified tax professional and file all prior years tax returns as soon as possible.  You will then find yourself on the way to relief from your tax issues.