Unfiled Tax Returns

From the perspective of the IRS, unfiled tax returns are a serious infraction that can lead to growing debt as back taxes and fines pile up. The IRS will only stop collecting once all unfiled tax returns have been filed and all money owed has been paid.

The IRS may levy your wages if you fail to file your tax returns.

What are Unfiled Tax Returns?

Unfiled tax returns are submitted to the appropriate tax authorities after the due date, whether for federal or state taxes. This means that the taxpayer should have recorded their income, deductions, or taxes owed to the government for a specific tax year.

Taxpayer must file their tax returns to meet their legal obligation to file their taxes and report their financial information to the government.

As a result, failing to file tax returns can result in a variety of consequences, including financial penalties and interest charges. The longer tax returns go unfiled, the larger the fines and interest charges. In extreme circumstances, the government may take legal action against the taxpayer, such as wage garnishment, bank account levies, and even criminal prosecution for tax evasion.

As a result, even if the taxpayer cannot pay the irs back taxes owed, filing tax returns as soon as possible is best. This will help to reduce the penalties and keep the taxpayer in line with the law.


Penalties for failing to file tax returns vary depending on the circumstances, but some common ones are:

  • Neglect to file a tax return by the target date normally results in a penalty of 5% of the unpaid taxes for every month the return has passed its date, with a maximum penalty of 25% of the outstanding taxes.
  • A penalty for neglecting to pay taxes owed, normally 0.5% of the total amount outstanding per month, with a maximum penalty of 25% of the total amount owed.
  • Interest is assessed on unpaid taxes, and the government decides the rate quarterly.
  • In extreme situations, the government may charge taxpayers with tax evasion, a criminal offence punishable by fines and imprisonment.

It is crucial to note that fines and interest charges can quickly build up. Therefore it is in a taxpayer’s best advantage to complete their tax returns and pay any taxes owed as soon as possible to minimise the consequences.

Resolving Unfiled Tax Returns

The following procedures can be taken to address the issue of unfiled tax returns:

  • Gather all essential information and submit all missing tax returns as soon as feasible

 The first stage in resolving unfiled tax returns is to gather all relevant information and file the missing returns as soon as possible.

  • Pay any owed taxes

 It is critical to pay taxes as quickly as possible to avoid fines and interest costs if taxes are owed.

  • Negotiate with the tax authority.

If you cannot pay your taxes in full, you can arrange a payment plan with the tax authority or seek a loan or other assistance.

  • Try expert assistance

If you need help filing missing tax returns or arguing with the tax authority, consider hiring a tax attorney or enrolled agent.

  • Maintain compliance

Once the issue of unfiled tax returns has been resolved, it is critical to maintain compliance and file tax returns on time in the future to avoid repeated problems.

These methods will assist in resolving the issue of unfiled tax returns and keeping the taxpayer in line with the law.

Filing the Unfiled Tax Returns

Following the filing of back tax returns, the following events may occur:

  1. Tax authority review: The tax authority will review and verify the information on your filed returns. They may call you for clarification if there are any discrepancies or issues.
  2. Return processing: If the returns are accepted, they will be processed, and any taxes payable will be determined.
  3. Taxes owing: If you owe taxes, you must pay the amount owed to the tax authority.
  4. You will be informed that if you are due a refund, the tax authority will process it and mail it.
  5. Payment plan or loan: If you cannot pay your taxes in full, you can negotiate a payment plan with the tax authority or seek a loan or other assistance.
  6. Penalty and interest charges are resolved: If you have incurred penalties and interest charges for unfiled tax returns, the tax authorities may decrease or waive the costs once the returns are filed, and the taxes are paid.
  7. Compliance: Filing back tax returns and addressing any taxes owed will assist you in remaining in compliance with tax rules and avoiding future problems with the tax authority.

The IRS statute of Limitations

The IRS Statute of Limitations for unfiled tax returns is usually ten years from the due date. The IRS has ten years from the initial due date to levy additional taxes or penalties for a specific tax year. The statute of limitations does not go about running if a tax return is not filed, and the IRS can take action to collect taxes and assess penalties at any time.

The statute of limitations begins after a tax return is submitted, and the IRS has ten years to levy extra taxes or penalties for that year.

It should be remembered that the Statute of Limitations on unfiled tax returns only applies to the assessment of additional taxes or penalties, not the collection of taxes owed. Regardless of the Statute of Limitations, the IRS can pursue enforcement action to collect taxes owed at any time, such as wage garnishment or bank account seizure.

As a result, it is in a taxpayer’s best interest to file all tax returns as soon as possible, even if they cannot pay the taxes owed, to avoid fines and enforcement action.

The Bottom Line

The tax resolution procedure can be intimidating if you have unfiled tax returns. The IRS Problems can guide you through this difficult process and provide you with the desired results.