Photo of Dr. Nikia Owens, Ph.D, Photo credit: Laura Elam
If you have not filed a tax return in one year or in several, the idea of catching up can feel overwhelming. Many people in that situation do nothing, assuming the problem is too complicated or that filing now will only make things worse.
Fortunately, it will not. Filing this year, even with unfiled returns from prior years, is almost always better than continued non-filing. Here is what you need to know.
Ready to file current or prior-year returns? Book your appointment with CWF’s tax preparation team now.
You May Still Be Entitled to a Refund
The IRS allows taxpayers to claim refunds on returns filed within three years of the original filing deadline. That means if you did not file in 2022 or 2023, you may still be owed money, alas, money that will not come to you unless you file.
Refunds from returns filed after that three-year period are generally forfeited. Every year you wait on a refund-eligible unfiled return, you leave money permanently behind.
Credits like the Earned Income Tax Credit and the Child Tax Credit can produce refunds for working families with low to moderate incomes. These credits do not require you to owe taxes to receive them. But they do require a filed return.
Are you owed a prior-year refund? Contact a CWF tax preparer today to review your situation and find out what you may be entitled to.
Filing Creates a Path to Compliance
Many people with unfiled returns assume the IRS has already assessed what they owe and that filing now will expose them to penalties they were previously avoiding. The opposite is generally true.
Non-filing is itself a legal violation, and the IRS has tools to assess what it believes you owe based on income records it already holds, including W-2s, 1099s, and other third-party documents. These IRS-prepared substitute returns typically do not account for deductions, credits, or personal exemptions you would be entitled to claim. The result is often a tax bill that is higher than it should be.
Filing your own return, even late, gives you the opportunity to report your income and deductions accurately, which typically reduces the amount owed and begins a process of resolution rather than continued uncertainty.
Stopping Enforcement Actions
When the IRS determines that a taxpayer has not filed, it can take enforcement steps, including:
• Filing a substitute return on the taxpayer’s behalf, which typically results in a higher tax assessment
• Issuing a notice of deficiency and assessing taxes, penalties, and interest
• Placing a federal tax lien on property
• Initiating levies on wages, bank accounts, or other assets
These actions do not happen immediately, but they become more likely the longer non-filing continues. Filing a current return and addressing prior-year balances, even through a payment plan, signals to the IRS that a taxpayer is working toward resolution and typically reduces the risk of escalated enforcement.
The IRS offers penalty abatement programs if you have a history of compliance or can show reasonable cause for late filing. These options are open only to those who file returns and stay involved in the process.
Concerned about enforcement or past balances? Act now, consult a CWF tax preparer to explore solutions and connect with further resources as needed.
Documents Needed When You Have Unfiled Prior Years
Gathering documents for several years may seem daunting, but you do not have to finish all at once. When visiting a CWF tax site, bring what you have. Our preparers will use what is available and help you identify what is missing.
Useful documents include:
• W-2s, 1099s, or any other income statements from the years in question
• Records of deductible expenses, including child care costs, educational expenses, and charitable contributions
• Any IRS notices you have received
• Social Security numbers for yourself, your spouse, and any dependents
If you do not have access to prior-year income documents, the IRS provides a Wage and Income Transcript that shows what was reported to the agency on your behalf. CWF can help you request this document.
Finally, it is better to file back taxes than avoid them; that is simply worse, because it only keeps accumulating. We know that it can be difficult to get started, so at CWF, we are always here to help you every step of the way.