The IRS advises filing any of your tax returns that are past due even if you can’t pay in full any additional taxes you owe. You should file past year tax returns before the government files a return for you or takes action against you. In addition to paying added penalties, you may not get all the exemptions and deductions you can take if the IRS files a return for you. Worse yet, if you fail to comply with requests from the IRS to file your past due returns, you could eventually find yourself facing criminal charges.
Go to the IRS.gov website. Download and print the publications, instructions, schedules and forms for the prior years you need to file an income tax return. You must file a paper return if you file your federal income tax return later than mid-October after the end of the current tax year. For example, when the 2012 tax year ends on Dec. 31, you have from mid-January to mid-October 2013 to e-file your 2012 tax return. You cannot electronically file tax returns for past years.
Fill out the paperwork for past year tax returns you downloaded in Step 1. Attach any financial documents that provide proof of your income for a previous year. You will need your Form W-2, business records if you are self-employed and 1099 forms if you received interest from savings or do freelance or contract work. If you paid mortgage interest, you will need your Form 1098. If you paid interest on a student loan, you will need Form 1098-E. You will also need receipts for the deductions you take or credits you claim. Make copies for yourself as well as the IRS.
Visit a Taxpayer Assistance Center near you if the IRS can’t answer your questions about a particular tax situation online or on the phone. The Taxpayer Advocate Service is another resource for taxpayers who need assistance resolving tax problems. Services are free. Every state has at least one taxpayer advocate office.
Set up a monthly payment plan if you can’t afford to pay the full amount of tax debt you owe all at once. You will owe additional penalties and interest on a balance you owe on a late tax return. If you are filing a tax return that's more than five months late, multiply the tax debt you owe by 25 percent to figure the failure-to-file penalty.
Calculate the failure-to-pay penalty by multiplying the amount of tax you owe on a previous year’s return by 0.5 percent for each month the tax is late. The IRS will also charge you interest on the tax you owe. Interest rates change quarterly and are calculated based on each day you don’t pay the tax due.
Send your back tax return by certified mail. Keep the receipt with the mailing date stamped on it. Request a return receipt signed by the recipient as well. It will cost you a few dollars, but that way you can prove that the IRS received your return.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.