What happens if you don’t file tax returns?

Has it been awhile since you filed a tax return?  Feeling guilty? Scared? Don’t know what to do?  Do you even need to file?

IRS is very good at “data matching.”  IRS receives and compiles your income data (ie W2s, 1099s, etc.) and compares their data against income you’ve reported on your tax return.

If you don’t file a tax return, IRS will prepare their own “substitute” version of your tax return, based on their “worst case” assumptions.  And, if they think you would have gotten a refund you won’t hear from them. But, if the IRS’ “substitute” return indicates you owe tax, you’ll get a letter indicating what IRS thinks you owe (along with penalties).  Note, it’s always way more than if you had prepared your own tax return.

Folks usually fail to file tax returns because they’ve been through a rough patch in their life.  Lost paperwork, couldn’t pay income tax, or forgot to file tax returns are additional potential explanations.  Unfortunately, failing to file your own tax return, and “not responding” to IRS letters’ requesting tax returns will create even more grief and penalties, like IRS wage garnishments, liens and levies, credit and banking problems. It’s difficult to function with such IRS headaches.

Sooner or later, for various reasons and motivations, folks realize they need to file their tax returns, and get IRS compliant. It’s common.

Don’t procrastinate any longer.  I prepare a lot of “catch up” of past year tax returns.  Even if you no longer have your tax records I can prepare your previous year’s unfiled tax returns based on wage and income transcripts obtained from IRS, along with your information.

Every situation is unique and there are lots of strategies and options for getting back on track with IRS.    For sure, professional representation is critical.

For a free, no obligation consultation, call me at 303-734-1040. Chuck Trautman EA, 9233 Park Meadows Drive, Lone Tree, CO 80124