We have compiled helpful answers into two groups for you:
- Quick Q&As with brief answers.
- Questions that require more detailed answers, of which we linked to their own pages.
Quick FAQs
What happens if I ignore the IRS and do not file?
The IRS can file a return for you- called a “substitute for return” or “SFR.” This return will include only your income and not allow you any deductions, credits, or any preferred filing status. The SFR will also include a late filing penalty.
How far back can I get a refund on a late filed return?
If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date, including extensions.
Can the IRS freeze a refund when I have unfiled returns?
Yes, if the IRS identifies that the taxpayer has an unfiled prior year return (especially a return in which the IRS projects a balance owed), they can freeze the refund and request the taxpayer to file. The refund is held for 6 months while the IRS requests a filed return from the taxpayer. If no return is received, an assessment may be made through the Automated Substitute for Return (ASFR) program, and the refund applied to any balance due.
Can I go to jail if I do not file my tax return?
Yes, late filing is a serious noncompliance issue. However, in most circumstances, the IRS gives a taxpayer multiple chances to file by sending notices to late filers. The IRS rarely prosecutes late filers who voluntarily and promptly file an accurate return.
What is the statute of limitations on late filed returns?
There is no statute of limitations on a late filed return. The IRS can go back to any unfiled year and assess a tax deficiency, along with penalties. However, in practice, the IRS rarely goes past the past six years for non-filing enforcement. Also, most delinquent return and SFR enforcement actions are completed within 3 years after the due date of the return.
What happens if I miss the notice deadline to file my late return?
If you miss the deadline on any IRS delinquent return notices (IRS notices CP 59, CP 515, CP 518), you should contact the IRS by phone to get your status and obtain any special filing instructions/address to file the late return. You should also ask for an enforcement hold to allow for additional time to file without IRS enforcement actions (SFR filing, collection, etc.).
Can I file my return after the IRS files a return for me?
Yes- the process of filing “over an SFR” is called “SFR reconsideration.” Taxpayers in these situations should contact the IRS and get instructions on where to send their late returns. Also, taxpayers should request a collection hold on their account to allow for IRS processing of the taxpayer’s return.
What penalties can the IRS assess on a late filed return?
Failure to file and failure to pay are common penalties assessed on a late filer who has a balance due on a late return. Late filers who do not owe do not face late filing or payment penalties unless they receive an additional assessment (i.e. an audit or underreporter assessment). If the IRS files a return for the taxpayer (SFR), the SFR notice will always have additional tax owed along with late filing and payment penalties.
Can I get penalty relief when I file a late return?
Yes, there are two common penalty relief requests: first-time abatement (FTA) and reasonable cause. If the taxpayer has a clean compliance record (no penalties in prior three years, all required returns filed, paid all tax or in a collection agreement that is in good standing), they can request relief from the failure to file and pay penalties using FTA. Taxpayers who have experienced unforeseen circumstances outside of their control can request, in writing, their penalties to be abated for “reasonable cause.”
Do I have to pay the amount owed when I file my late return?
No, payment is not required. However, once the tax is assessed, the taxpayer will need to make collection arrangements (an extension to pay, a payment plan, file for hardship status as currently not collectible, or request an offer in compromise to settle the balances owed) on the outstanding balance owed.
Is there tax software to file prior year returns?
Yes, most commercial tax software programs allow for taxpayers to prepare and file late returns. Be aware that tax rules change each year. Most taxpayers should consider getting assistance from a qualified tax professional who has knowledge of prior year rules and late filing procedures.
Can I e-file a prior year return?
Yes, you can e-file the current and prior two years if you use tax software. Note: the IRS closes e-file each year in mid-November and reopens it in January. During the e-file closure period, taxpayers must paper file prior year returns.
How can I get my IRS account and wage/income transcripts?
You can order these transcripts online to be mailed to the taxpayer’s last address on record. Taxpayers can also set up an IRS online account and use the “Get Transcript” tool to immediately obtain their transcripts. If these methods do not work, the taxpayer can call the IRS or visit a Taxpayer Assistance Center and obtain the transcripts. The IRS will not fax the transcripts. Taxpayer should consider using a tax professional with an e-Services account if they need to quickly obtain and interpret their IRS transcripts.
When does the IRS require more than the past six years to be filing compliant?
The IRS Policy Statement (5-133) does not apply to business returns (employment tax returns Forms 940, 941, 944; income tax return Forms 1065, 1120, 1120S, and many other types of returns). For individual returns (Forms 1040), the IRS usually applies the six-year rule unless they suspect significant past liabilities in years prior to the last six years. Most deviations from the six-year rule occur when the delinquent return investigation is assigned to a local IRS collection office (i.e. to a revenue officer).
Who do I call at the IRS about my past-due return?
You can get information about your account, including transcripts, from the IRS individual accounts management hotline at (800) 829-1040. Business accounts should call (800) 829-4933. If your return delinquency is assigned to an SFR unit, you can contact them at (866) 681-4271. Taxpayers should call early on these hotlines (8AM) to avoid long wait times and IRS disconnects. In urgent situations, taxpayers should consider engaging and authorizing a qualified tax professional who has a special hotline to expedite obtaining answers and getting account information for taxpayers.
Expanded FAQs
Click on any question below for a detailed answer.
- How do I find out if the IRS accepted my late filed tax return?
- How far back do I need to file late prior year returns?
- How aggressively does the IRS pursue non-filers?
- How do I get in good standing with the IRS when I have back returns to file?