24 Feb I haven’t filed taxes in over 10 years. What should I do next?

Q. I haven’t filed taxes in over 10 years. My income is modest and I will likely receive a small refund for 2019 when I file. I don’t own a home, I have no investments. Many years ago I owed the IRS money but they stopped contacting me. What should I do next?
— Tax unwise

A. This is a dangerous area. When it comes to tax collections, few people successfully fly under the radar.

If you have old, unfiled tax returns, it may be tempting to believe that the IRS or state tax agency has forgotten about you, said Jonathan Donenfeld, a certified public accountant with JLD Tax & Accounting in Jersey City.

He said you could still be on the hook 10 or 20 years later.

If you don’t file and pay taxes, the IRS has no time limit on collecting taxes, penalties and interest for each year you did not file, he said.

“If you have unfiled returns for multiple years, you should first get a copy of your IRS account transcripts, which will show what returns haven’t been filed and what actions the IRS has taken against your account,” he said. “The IRS may have filed substitute returns on your behalf and/or assessed tax against you. Substitute returns are filed with no deductions so you should look at amending them if they are filed.”

You can get your transcripts here.

If you are due a refund for 2019, Donenfeld said the IRS would most likely not issue the refund if you have unfiled tax returns.

“If you are due refunds from previous years, you must file the returns within three years of the due date otherwise you will lose those refunds permanently,” he said.

Learn more about how to make things right with the IRS here.

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This story was originally published on Feb. 24, 2020.

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