I know someone who didn't file his taxes for the last five years, and he was asking me what happens? I guess he went through a breakup and was completely broke, and then it snowballed every year he was just scared to file but now he wants to make it right and doesn't know who to call, what to do or how much it might cost. He said a couple of those years he might have even got money back, but he just didn't have anyone to help him with the filing process.
WHAT WILL HAPPEN TO HIM? What should he do to make it right? He doesn't want to go to jail or get in trouble, he just wants to make it right. Any advice would be nice and I will pass the info along to him.
Anonymous2010-01-30T10:45:57Z
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If nobody has come out and read him his rights yet, then the worst that can happen is he will owe money that he can or can't pay. He will need to file the returns. If he doesn't have his W-2s or 1099s, they can be retrieved.
He needs to call the IRS and explain what happened.I have been on the short end with the IRS several times in the past and I can tell you there is nothing to fear, especially since he thinks there may have been years when he should have received a refund. the IRS is very helpful and every time I have called them they have been very good. By comparison, if you have ever been late on a credit card payment, the way the banks treat you is FAR worse than how the IRS will treat you.
He will be subject to late filing penalties on all years he did not file by the due date. Also, for any years there was tax due he will be subject to interest and penalties.
Here is something from the IRS web site: Filing a past due return may not be as difficult as you think. Taxpayers should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved. However, full payment of taxes saves you money.
Failure to file a return or filing late can be costly. If taxes are owed, a delay in filing may result in penalty and interest charges that could increase your tax bill by 25 percent or more. You may be entitled to a refund. However, to get your refund, you must file a tax return within three years of the original due date of the return, or two years from the time you paid your tax.
If you owe tax and don't file on time, the total late-filing penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to five months. If your return is over 60 days late, the minimum penalty for late filing is the smaller of $100 ($135 for returns required to be filed after December 31, 2008) or 100 percent of the tax owed.
He should file as soon as possible. Waiting longer will only increase the costs. He will not go to jail or get in trouble unless he commits fraud or refuses to pay.
He can begin by filing 2009 and work on the earlier years.
He can call the IRS 1-800-829-1040 if he doesn't have all of his tax records (W2s etc) and to find out if he needs to file 2005 or earlier years
If he was due a refund, then he can still get that refund from 2006, but not earlier years if he files by Apr 15 2010 If he owes money in any one year, he will owe interest and penalties.
Many companies have software online for prior years to purchase. Here is the link for TurboTax http://turbotax.intuit.com/support/kb/buying-and-billing/orders-and-refunds/585.html
The IRS has the forms online for prior years if you can do it yourself.
he wants to get his papers together and file each and every year if he has a refund due in those years interest will be added however, if he has refunds that might be for an older year, he will not get the refund, there is a time limit for unclaimed refunds by all means, get the back returns filed