I Haven't Filed Taxes in Years! Am I in Trouble?

What kind of trouble can I get into? The last time I filed my taxes was in 2000 (six years ago). I am sure that I do not owe anything, or at least did not as each year passed. Is it okay to walk into a tax preparer's office with all of these W-2s and request he do my taxes?

Question:

The IRS won't refund taxes on any return that's more than two years overdue, so you can give a tax preparer your 2003 return (that was due in April 2004) before April 15, to get your refund. Might as well prepare 2004 and 2005 at the same time.

The earlier returns should probably be filed, even if you don't owe any taxes, but there isn't such an urgency about them. My guess is that the IRS has already figured out that you don't owe any taxes, and that's why they haven't bugged you about them.

But what if you do owe taxes? Well, the best thing to do is to come clean quick. Hiding from the IRS won't work because if you haven't filed a tax return, they can always come after you, and someday, they will. Don't be afraid to face them now -- remember, they don't want to kill you; they just want the taxes that are due. If you don't have complete records, it's best to prepare returns based on your best estimate of the facts. Once the IRS has received the tax forms, they'll compute interest and penalties due. If you can't afford to pay the whole amount due, you can propose monthly payments to the IRS by filing Form 9465, which is their Installment Agreement Request.

--Ginita Wall, CPA, CFP, Finances for Women Expert

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