The question is relative actually. Is it ever too late to file tax returns from prior years? There could very well come a time when failing to file prior year tax returns will come back to haunt you, and there will be nothing you can do. However, that time could be a long time coming, and it is usually possible to remedy the situation before it gets to that. That does not mean that there will not be consequences, but those consequences are better than the ones that could come with never filing.
If you have prior year tax returns that need to be filed, frankly the sooner you get it done the better. This is especially true if there is a sizeable amount that will be owed. The reason is, the longer you put it off, the larger that amount gets. Penalties and interest add up fast, and the longer you put off some sort of payment agreement with the IRS, the worse it gets. Also, the faster you get the returns filed, the more chance you have for qualification of special payment programs such as an Offer in Compromise or abatement.
Other reasons include not being eligible to claim refunds, though the IRS will take what is needed to cover any debt owed. When the time comes that the refund would be yours to keep, you would likely want to be able to do that. Also, the risk of being audited is always looming, and it is much better to have your tax business in order before that time.
While it can be overwhelming, there is no reason to do it alone. A CPA can help you get things back in order and on the right track so that you can get business settled with the IRS. It is amazing how it feels to get the payments moving so that you can be out from under the weight of owing back taxes from prior returns. A professional tax accountant can also offer tips and help for keeping things from getting to this point again, and can even make sure you are not paying a penny more than you have to. In the end…get your prior year tax returns filed ASAP.
We are a CPA firm and we help clients who need to file prior tax returns. Call us now for a FREE consultation at 1-888-570-1033.
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