Unfiled Returns – Delinquent Tax Returns

Many taxpayers fail to file required tax returns for many reasons. The taxpayer must be aware that failure to file tax returns may be construed as a criminal act by the IRS. This type of criminal act is punishable by one year in jail for each year not filed. Needless to say, it’s one thing to owe the IRS money but another thing to potentially lose your freedom for failure to file a tax return. The IRS may file “SFR” (Substitute For Return) Tax Returns for you. This is the IRS’s version of an unfilled tax return. Because SFR returns are filed in the best interest of the government, the only deductions you’ll see are standard deductions and one personal exemption. You will not get credit for deductions which you may be entitled to such as exemptions for spouses, children, interest and taxes on your home, cost of any stock or real estate sales, and business expenses, etc. Regardless of what you have heard, you have the right to file your original tax return, no matter how late it’s filed.

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12 Responses to “Unfiled Returns – Delinquent Tax Returns”

  1. Tommie Says:

    Last comment on site: Regardless of what you have heard, you have the right to file your original tax return, no matter how late it’s filed. – QUESTION: – and from the time that you do file (late) the time period for the IRS to question you about the previous years returns starts. Correct?
    Does the tax payer have rights regarding payments the IRS refuses to pay due to time limitations from the late returns, said returns filed due to the IRS filing a SFR which showed you owed 12K. It seems its okay for the IRS to pursue the taxpayer but if you don’t make your claim to your money in a timely fashion (although they’re still there, and in fact its the taxpaper overpaying it and the government using it until which time its actually claimed…..
    I am experiencing a hardship and any information would be very appreciated.

  2. Tommie Says:

    Stated: you have the right to file your original tax return, no matter how late it’s filed. – QUESTION: – and from the time that you do file (late) the time period for the IRS to question you about the previous years returns starts. Correct? Does the tax payer have rights regarding payments the IRS refuses to pay due to time limitations from the late returns required to file as not to owe the IRS over 10k?

  3. Michael Rozbruch Says:

    QUESTION: From the time that you do file (late) the time period for the IRS to question you about the previous years returns starts. Correct?

    ANSWER: Yes. They have 3 years to audit you from the date the delinquent return is FILED. In addition if the IRS has information (usually from 3rd party payors) they can go back as far as they want in to get you to file a return. The ITS’s computer is flagged with a “TDI’ (Taxpayer Delinquency Inquiry) on these particular years.

    QUESTION: Does the tax payer have rights regarding payments the IRS refuses to pay due to time limitations from the late returns, said returns filed due to the IRS filing a SFR which showed you owed 12K?

    ANSWER: This is probably the most unfair law that congress has ever passed, but it’s true. The IRS will only credit the overpayment to the year it was earmarked for. In other words let’s say you just filed year 2002 and it shows a refund of $12,000. That 12,000 cannot be applied backward or forward if you owe for previous or subsequent years. It’s a terrible law, but that’s how they get (or want) you to file on time.

    QUESTION: Does the tax payer have rights regarding payments the IRS refuses to pay due to time limitations from the late returns required to file as not to owe the IRS over 10k?

    ANSWER: The IRS , by operation of law, has no obligation to refund the taxpayer money more than 3 years from the due date of the return, including extensions.

  4. Jerry Mahony Says:

    It works both ways. The Service is barred (excepting cases of fraud) from examining returns after statute. The taxpayer is barred from refunds on returns past statute.

  5. Tamara L'official Says:

    I have some tax returns that I haven’t filed and need help on how to handle this matter. I don’t owe overe 10,000. Would this be something that I could receive help with?

  6. TRS Says:

    Hi Tamara. You can contact the IRS direct and ask them for a monthly payment plan. 800-829-1040

  7. Stan Forever Says:

    Some say that the tax system is voluntary. If that is true, how can they require one to file a return against his free will?

  8. TRS Says:

    When you hear people say that taxes are voluntary, that’s because it’s voluntary to file a tax return. It’s not voluntary to pay. You have to pay. The voluntary part is that if you don’t file your own tax return, the IRS will do it for you. And they’re going to do it in their best interest by filing a Substitute for Return (SFR) and preparing your tax returns for you without taking any of your allowable deductions – leaving you with a larger tax liability.

  9. Melissa Says:

    I did not file a 2006 federal tax return . I filed my state last year and paid it off after getting a letter. I recently got a different letter stating that I now owe over $7,000 in federal taxes, interest and penalties. I originally owed $4000, which is probably close to correct. I am going to file my return this week. Is there any way I can negotiate the total amount due? I will definitely need to set up payments, how do I do this? I noticed that most tax resolution consultants require that you owe over $10K-$15K in back taxes. Are there any consultant out there that deal with smaller cases? Is it worth it? Can you offer some advice to what I should do.

  10. Melissa Says:

    One more question. Where can I go to find out more information on how to file a past due return?

  11. Kev Says:

    Question: How does it work if I filed extensions the past few years (refunds due) but no returns?
    I’m reading alot about unfiled returns but no mention of unfiled returns with refund due.
    Thanks, Kev

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