If you haven’t filed tax returns in years, you’re not alone. Many people fall behind due to job changes, medical issues, business losses, divorce, or simply feeling overwhelmed by the process. Unfortunately, ignoring unfiled tax returns does not make the problem go away. The IRS continues to track missing filings, assess penalties, and may eventually take collection action.
The good news is that there are clear steps you can take to get back into compliance and protect yourself from escalating penalties and enforcement.
Today, our blog explains what happens when tax returns go unfiled, what your risks are, and how to safely move forward.
Want to make sure you avoid back taxes scam calls? Follow our advice here.
What Happens If You Don’t File Your Tax Returns?
When a tax return is not filed, the IRS does not automatically forget about it. Instead, several things may occur:
- Failure-to-file penalties begin accruing and can grow quickly over time.
- Interest continues to accumulate on any unpaid tax balance.
- The IRS may file a Substitute for Return (SFR) using income data reported by employers or banks, which often results in a higher tax bill because deductions and credits are not included.
- You may lose access to refunds if too much time passes.
- The IRS can eventually pursue collection actions, including liens, levies, or wage garnishment.
Unfiled returns also prevent you from setting up payment plans, hardship status, or settlement options until the filings are completed.
For disabled individuals, you may have tax forgiveness options. Review them here.
How Many Years Do I Need to File Back?
In most cases, the IRS requires the last six years of tax returns to be filed in order to bring an account back into compliance. However, your specific situation may require fewer or more years depending on your income history, enforcement activity, and whether the IRS has already filed Substitute for Returns on your behalf.
A tax professional can review your IRS transcripts to confirm exactly which years are required.
Step 1: Gather Your Income Information
Start by collecting documents for each unfiled year, including:
- W-2s from employers
- 1099 forms for freelance, contract, or investment income
- Bank and brokerage statements
- Prior tax records if available
If documents are missing, the IRS can provide wage and income transcripts that show what was reported under your Social Security number.
Step 2: Prepare and File the Past-Due Returns
Each missing year must be prepared and filed individually using the correct tax forms for that year. This process allows you to:
- Claim eligible deductions and credits
- Correct any IRS substitute return estimates
- Determine your true tax liability
Even if you cannot afford to pay what you owe, filing the returns is still critical. Filing stops additional failure-to-file penalties and opens the door to relief programs.
Step 3: Understand Your Balance and Options
Once your returns are filed and processed, you’ll know your total balance owed. At that point, several options may be available depending on your financial situation:
- Installment Agreements to pay over time
- Currently Not Collectible status if paying would cause hardship
- Penalty abatement in qualifying circumstances
- Offer in Compromise in limited cases
The right solution depends on your income, expenses, assets, and long-term financial stability.
What If the IRS Already Filed a Substitute for Return?
If the IRS filed a Substitute for Return on your behalf, you still have the right to file an accurate return to replace it. This often reduces the balance because the IRS version does not include deductions, dependents, or tax credits for which you may qualify.
Filing the correct return can significantly lower your tax liability.
What Many People Get Wrong About Back Taxes
Many people delay filing because they believe that if they wait long enough, the IRS will eventually stop pursuing the missing returns, or that they shouldn’t file until they can afford to pay what they owe.
In reality, the IRS can continue to pursue unfiled tax returns indefinitely in many cases, especially when no return was ever submitted. Filing and paying are also two separate obligations.
Even if you cannot pay your balance right away, filing your returns helps stop additional failure-to-file penalties and gives you access to payment plans and relief programs that can make the debt more manageable.
What If I’m Afraid of What I’ll Owe?
Fear is one of the biggest reasons people delay filing. However, avoiding the issue almost always makes the outcome worse. Once your returns are filed, you can work with the IRS to find a manageable solution based on your ability to pay.
Professional guidance can often reduce penalties, correct inflated IRS estimates, and structure affordable resolutions.
Take Control of Your Back Taxes
Falling behind on tax filings can feel overwhelming, but it is fixable. The sooner you take action, the more options you preserve and the easier it becomes to regain financial stability.
Tax Relief Helpers can help you identify missing years, prepare back returns, communicate with the IRS, and choose the best resolution strategy for your situation.
Call (800) 659-6706 or request your free consultation today.