Unfiled Taxes Tips

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What if I didn't receive a W-2?

Missing Information

Sometimes you may find that the tax filing deadline is fast approaching and you have not received all of your applicable information. You are not sure what to do, or who to contact. So, you do not do anything. You do not file a tax return. Then, a few months pass and you still have not received the information from your sources. You know you owe back taxes. What do you do?

First of all, start the process earlier. If you have not received your tax information by January 31 of the current year, contact the source. If you are an employee, it will be your employer. You need a W-2 from them. If you are self-employed, it will be your customers, i.e. For investors, financial institutions should have sent you 1099 series containing dividends, interest, capital transactions, etc.

If you have not received the information by February 15, of the current tax year, contact the IRS. This date is given since more than likely the matching program used by the IRS will have the information you need. It will have received third party documentation containing your tax information. The IRS can help you. To be certain the IRS receives the information, however, they recommend giving until August. This date is given since the main part of filing season is done. The IRS can deal more expeditiously on your request then.

Or, if you misplaced your W-2, contact the IRS. If your employer has not provided you with duplicate copies of this tax form, the IRS will have the information – many times.

Use this information to prepare your tax return to the best of your abilities.

If you do not file. If you find that April 15 (average date) has come and gone and you still have not received the applicable documents, you have two options. Contact the IRS, or wait for them to contact you. It is easier to wait for them to contact you. They more than likely will send you a Notice of unpaid taxes and an unfiled tax return.

Respond to the IRS Notice with a letter you composed in which you explain your situation. Explain why you have your unfiled tax return, and your unpaid back taxes. Be sure to mention their Notice number, notice date, and reason for the notice.

What is a back tax form?

Back Tax Forms

Whenever you are ready to file your back taxes, you have two options:

  • Obtain directly from the IRS
  • Develop a substitute form
IRS. The IRS usually carries tax forms for prior tax years. You can obtain them by ordering online, downloading them from the IRS website, or calling the IRS toll-free to order them. You will be calling 1-800-829-1040 to request your back tax forms.

Substitute tax forms. The IRS has a Substitute Forms Unit that accepts IRS tax forms that you develop. However, there are guidelines that must be met. For instance, the substitute tax form you develop must:

  • Be on white, unlined paper
  • Conform to the physical layout of the applicable IRS form. (Have the same number of pages, i.e.)
  • Wording should match the official IRS form as closely as possible
  • All perjury statements must be worded verbatim as the original IRS form.
  • Prior approval is needed unless the only change is the preprinted year.
  • The substitute form you develop must not hinder the IRS tax process.
You need to know that the following tax forms are not allowed by the Substitute Forms Unit. You will need the actual tax form where applicable, in other words.

Wager earner documents: W-2, W-2c, W-3, and W-3c (see Publication 1141 and 1223 for information on these forms).

Income reporting documents: 1099 series, W-2G (gambling winnings), 1096, 1098 series, 5498 series and 1042-S (Publication 1179 provides more information on this area)

State tax forms. Period.

Federal Tax Deposit (FTD) coupons

Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced.

Forms 5500, 5500-EZ, and associated schedules (see the Department of Labor website (www.dol.gov) for information on these forms).

Requests for information or documentation you received from the IRS.

Submitting. You can send your substitute tax form to the Substitute Forms Program via email. The email address is taxforms@irs.gov. In the subject line, be sure to put “PDS Submissions”. Your documents must be in pdf format.

Here are some more guidelines for sending email substitute forms to the IRS:

  • Do not send individual files for each of your substitute forms. You need to send one attached pdf file containing all of the forms you wish to submit.
  • The process of emailing your substitute tax forms will not quicken the review or approval process. The files are dealt with in the order they are received, along with any mailed-in submissions.
  • Of course, the smaller your submission, the quicker the processing time.
  • Be sure to optimize your pdf file prior to submitting.
  • Largest attachment is 2.5 megabytes.
  • Zip files are acceptable.
In addition to submitting forms via email, you may continue to send your submissions to:

Internal Revenue Service
Attn: Substitute Forms Program
1111 Constitution Avenue, NW
Room 6406
Washington, DC 20224

What are the penalties for not filing my return?

Penalties And Unfiled Taxes

Naturally, the quicker you file your back tax return, the sooner you can avoid penalties and interest. Of course, the IRS has penalties that apply to not paying your taxes on time. They also have penalties for not filing a tax return (unfiled tax returns).

Filing late. If you owe back taxes due to not filing your tax return on time, the IRS penalty is known as the failure-to-file penalty. It is usually 5% for each month in which your taxes are unpaid. It cannot exceed 25%.

If your reason for not filing on time was based on fraud, the penalty goes up to 75%. It starts at 15% for each month your taxes remain unpaid. If you can show the IRS a reasonable cause for not filing on time (and not willful neglect), you may avoid this penalty.

Paying late. Failure to pay penalty. Back taxes can accumulate due to your not paying taxes on time. This does not count during the automatic 6-month extension period if you have paid at least 90% of your unpaid tax bill upon filing.

Combined penalties. There is a combined penalty discount if you are involved in both of the above situations. There is a minimum penalty of $100 or 100% of the unpaid tax if you file your tax return more than 60 days past its original (or extended) due date.

If you are involved in an installment agreement, the penalty amount will decrease. However, you need to have filed your tax return on time, just not paid your taxes, to get this penalty reduction. If you have not paid your back taxes after many attempted communications from the IRS, you watch out. If the IRS determines that you are involved in tax evasion, fraud, or purposely failed to file a return – you may be facing criminal prosecution.

How do I pay back taxes?

How To Pay Back Taxes

When you pay your back taxes, you will be using any of the methods available for paying ‘regular' taxes. Therefore, you can pay by mail with a hard copy, by phone via credit card or direct debit, or online via various payment centers.

Mail. When you want to mail in your previously unfiled tax return, you can send a tax payment along with it. You can prepare and enclose a check, money order, or cashier's check. Make your paper document payable to the United States Treasury. You also need to include in the memo section: type of original tax form (1040, etc.), tax year payment applies to, IRS notice number (if any), your taxpayer identification number. If available, include the IRS Form 1040-V (Payment Voucher).

Phone. You can make back tax payments using either the EFTPS program or your credit card.

If you have set up an electronic funds withdrawal program through the ETFPS, you can pay your back tax bill by phone.

The EFTPS (Electronic Federal tax Payment System is operated by the United State's Department of Treasury. The EFTPS involves direct debits from your applicable bank account. You can use this system 24 hours a day, 7 days a week. It is secure, safe, and easy to use. You simply sign up for it online through a link found on the IRS website. Or, you can go directly to eftps.gov. Once you sign up for EFTPS, you can pay your back taxes either online through their website or by calling them at 1-800-555-4477.

Credit Card. You can also pay via credit card using the phone. The IRS accepts American Express, MasterCard, Visa, and Discover. A convenience fee may apply when making payments via credit card, however. Two companies are set up to collect tax payments by phone:

  • Link2Gov via online at pay1040.com. Or, call them at1-888-PAY1040 (1-888-729-1040) to make a tax payment
  • Official Payment Corporation (officialpayments.com) online. They also can be reached via phone at 1-800-2PAYTAX (1-800-272-9829).
Cash. You can pay your back taxes by cash. Just be certain you do this at your local IRS branch office. Do not mail cash, obviously. Get a receipt, also.

What is the IRS statute of limitations for back taxes?

Statute Of Limitations

According to IRS tax rules and regulations, they have a time limit on when they can come after you and collect back taxes. This time limit is known as the statute of limitations.

The statute of limitations for recovering back (unpaid) taxes is 10 years. And, this 10-year period starts from the date your original tax bill was due. For instance, if your original tax bill was from your 2006 Form 1040, the IRS has until 2016 to collect the back taxes.

However, if you never filed a tax return, the IRS can come after whenever they please. In other words, there is no statute of limitations for IRS actions if you do not file a tax return.

The 10-year statute of limitations is extended if you have taken any of the following actions to pay your back taxes:

  • Filed for bankruptcy
  • Entered into an Offer in Compromise agreement
  • Entered into an installment agreement
  • Signed an extension tax form

What is a special situation regarding back taxes?

Special Situations

There are a couple of situations that may apply to you that the IRS will allow leniency in collecting your back taxes.

First, if you are experiencing any significant financial hardship, that causes you to be unable to currently pay any of your back taxes, notify the IRS. A significant financial hardship example would be loss of job, disability, etc. The IRS may be able to temporarily suspend any collection efforts on your account. Just explain to them what your significant financial hardship is and why you cannot pay your back taxes.

Even by temporarily suspending collection efforts, however, interest and penalties will still be accruing on your back taxes.

Also, if your or your spouse are a member of the Armed Forces, you may be able to defer payments of income taxes. Contact the IRS for special circumstance criteria.

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