If you haven’t filed your tax returns in a while, how do you get back into compliance? Do you need an attorney?
Many people are able to file their back tax returns using TurboTax or other tax software.
- 1 You might need a CPA or attorney in some cases
- 2 How far back do you need to go?
- 3 Should you file your tax returns if you can’t pay the taxes?
- 4 Step 1 – Get your wage and income transcripts from the IRS
- 5 Step 2 – Prepare and file your tax returns
- 6 Step 3 – Mail your tax returns
- 7 Step 4 – If you owe taxes, request a payment plan
You might need a CPA or attorney in some cases
You may need to retain a tax attorney if any of the following apply:
- You are a high-income earner and expect to owe a substantial amount in taxes, and especially if you’ve been stashing the money away in IRAs and other investments or paying off your mortgage, instead of paying the IRS
- You expect to owe over $100,000 in back taxes after filing the returns
- You have a history of nonfiling, accumulating back taxes, or have been repeatedly contacted by IRS for nonfiling
- You have education or experience in tax matters
- You have a history of criminal tax prosecutions
- You have a history of filing false returns, overstating expenses, or not reporting income on your tax returns
- You are under audit for nonfiling
- You have a large number of cash transactions
- Any other situations where you might need attorney-client privilege
If the above situations don’t apply, you may need an accountant if:
- You are self-employed, an independent contractor, or a business owner and have business expenses to report
- You have income that is not reported on W-2s and 1099s, and your income needs to be reconstructed
If none of the above situations apply, then you may be able to file your back tax returns yourself.
How far back do you need to go?
The IRS typically does not require a taxpayer to file more than 6 years of delinquent tax returns. That means in most cases, you should file the current year return and the 6 previous returns.
Should you file your tax returns if you can’t pay the taxes?
Yes. There’s no reason to not file your tax returns if you can’t pay.
In fact, the longer you wait, the more you will owe. Failure-to-file penalties will continue to accrue.
There’s also a greater chance you could be audited for nonfiling.
You should file your returns and then request a payment plan if you can’t pay.
Step 1 – Get your wage and income transcripts from the IRS
If you do not need an attorney or CPA, follow these steps to file your back tax returns.
A wage and income transcript shows data from information returns such as Forms W-2, 1099, 1098 and Form 5498. Current year information may not be completely available until July.
Warning: Wage and income transcripts only show income that was reported to the IRS by 3rd parties. If you have other income, you still need to report it even if it’s not on the transcript.
You should request a transcript for each year that you are filing. If you made estimated tax payments, you should also order a copy of your account transcript for each year.
You can request a transcript online or by mail.
You can make an online request for a transcript using the Get Transcript tool.
To order using the Get Transcript tool on the IRS, you must have a Social Security number (SSN) to register, along with the following information to verify your identity:
- your SSN, date of birth, filing status and mailing address from latest tax return,
- access to your email account,
- your credit card number or account number from an auto loan, mortgage, home equity loan or home equity line of credit, and
- a mobile phone with your name on the account.
To request online:
- Visit www.irs.gov/Individuals/Get-Transcript and click “Get Transcript Online”
- Enter in the requested information.
Once you have successfully entered your information, you will be able to:
- View, print or download your transcript
- Receive a Username and password to return later
To receive your transcripts by mail, you can either make the request online or by phone.
For an online request you will need:
- an SSN or Individual Tax Identification Number (ITIN),
- your date of birth, and
- the mailing address from your latest tax return
To make an online request:
- Visit https://www.irs.gov/individuals/get-transcript and click “Get Transcript by Mail”
- Enter your identifying information.
You can also request your transcripts by calling the automated request line at 1-800-908-9946
Once you have ordered your transcripts they will arrive in 5 to 10 calendar days at the address the IRS has on file for you.
Step 2 – Prepare and file your tax returns
There are dozens of tax software providers available to electronically prepare and file your returns.
You may also qualify for free tax preparation software.
To prepare your tax returns, enter the information from your wage and income transcripts. If you have income that is not shown on the transcripts, you must still report the income on your tax returns.
Step 3 – Mail your tax returns
Mail your tax returns to the correct IRS submission processing center with a tracking number or certified with return receipt.
If you have multiple tax returns, it is recommended to mail each return individually in separate envelopes, so you have a tracking number or return receipt for each return.
Step 4 – If you owe taxes, request a payment plan
It will take several weeks for the IRS process the returns. If you owe taxes, you’ll receive notices.
When you receive the notices, you can contact the IRS to arrange a payment plan.
There are several ways to request a payment plan*.
- Do it online. If you owe less than $50,000, you can request an IRS payment plan online at https://www.irs.gov/payments/online-payment-agreement-application
- By mail. If you owe less than $50,000, you can fill out Form 9465 and send it to the IRS.
- Over the phone. If you owe less than $250,000 you can set up a payment plan over the phone at: 800-829-1040 (individuals) or 800-829-4933 (businesses).
- If you owe more than $250,000, your case might be assigned to a revenue officer. You should hire a tax attorney to represent you.
*If you are not able to afford the minimum payment on a payment plan, you should consult with a tax professional to see if you qualify for currently not collectible or an offer in compromise.