I haven't bothered to file a tax return in 10 years...

[Stoneheavy]

Waaaaaaaaay back in 2004 or 5, I can't remember, the IRS phone robot told me I owed over $900, which I didn't have, so I paniced and hung up and haven't bothered to file since.

Now my credit is really good and I want to buy a small house, so I'm gonna have to do something.  Should I just got to HR Block or someplace and tell them to file them all, or do I need a Tax lawyer or CPA or what?

From what I''ve read lately, if you go to the IRS before they have to come to you, they are pretty easy to deal with and don't really kick you while you're down, so I should make the first move.   I've never made more than 40K per year and don't have any investments or anything, so it would just take a bunch of 1040EZ's anyway.

[Anonymous]

I never made much money before a few years ago. I've barely been doing mine, as every year I was more focus on getting my moms house out of forcloure during that time. I'm kinda in the same boat, I need to get on this.

[pipeguy]

Talk to an attorney first !

I assume you were having standard and correct withholding all along? You don't "have to" file if you are due a refund or don't owe money, but "have to" is subjective because they won't know if you owe unless you file. Should you come away having enough withheld every year not to owe back taxes it's not going to be very painful, but if you owe, you'd better have all your W2's, 1099's, etc and expect everything to get audited with a bunch of things "disallowed".

Talk to an attorney first - you can go up against the IRS without an attorney - I did and did okay, even though I don't believe I owed them a penny, what I settled for was probably less than it would have cost me in legal fees to fight it through the tax courts (settled for less than 10% of their demanded amount). That does NOT mean that a couple of hours with a good tax attorney is not money well spent even if you go it alone.

If you are going to buy a house, it's a major tax write off every year (interest and taxes) but you can't expect to just start filing again without expecting the IRS to come after you.

Good luck !

[Anonymous]

You haven't received any letters from the IRS?

I would recommend finding a reputable CPA to help you file everything - that would be the fastest/safest way in my opinion.  Most likely they will ask you to bring in all your docs (W-2s, 1099s, etc.) for the appropriate tax years and a copy of the last tax return you filed.  No need for a tax lawyer.  You just need to get your taxes filed.  

If you're owed a refund, it's only limited to a few years back, and expect them to take their cut for the years you owed on prior to the disbursement.  If you owe a lot of taxes, you may be able to set up a payment plan with the IRS;  but, nonetheless, expect to pay a bit in penalties and interest which the IRS will gladly mail to you in the form of a letter with a breakdown.  Your CPA will be able to give you all the details and a better understanding when you meet with her/him.

I assume you have all of your W-2s?  Your employer should have been filing them yearly and withholding federal and state taxes (if applicable).

I work at a small CPA firm       Not a CPA myself, but I'm working on it.

[Anonymous]

This is a very similar situation to having lived abroad and now back in the States. If a person was abroad and not working, then no taxes would have been paid nor a tax returned needed to be filed.

• How do people in that situation get around the need to have two years of tax return to buy a house?
• Also if you return and the first year don't make a lot of money, but revert to the norm the secon year, what are you suppose to do? Wait three years? 

[Anonymous]

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@pipeguy wrote:

Talk to an attorney first !

I assume you were having standard and correct withholding all along? You don't "have to" file if you are due a refund or don't owe money, but "have to" is subjective because they won't know if you owe unless you file. Should you come away having enough withheld every year not to owe back taxes it's not going to be very painful, but if you owe, you'd better have all your W2's, 1099's, etc and expect everything to get audited with a bunch of things "disallowed".

Talk to an attorney first - you can go up against the IRS without an attorney - I did and did okay, even though I don't believe I owed them a penny, what I settled for was probably less than it would have cost me in legal fees to fight it through the tax courts (settled for less than 10% of their demanded amount). That does NOT mean that a couple of hours with a good tax attorney is not money well spent even if you go it alone.

If you are going to buy a house, it's a major tax write off every year (interest and taxes) but you can't expect to just start filing again without expecting the IRS to come after you.

Good luck !

---

Unless he is having issues with the IRS currently, he does not need an attorney - If he were to consult one now, they would tell him to go file his taxes.  Any lender, as far as I know, is going to demand tax returns before taking any further steps in the process;  doesn't matter if you were required to file or not.  And yes, if he were to secure a mortgage loan, his mortgage interest and property taxes would be deductible; assuming he's itemizing. 

[Anonymous]

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@Anonymous wrote:

This is a very similar situation to having lived abroad and now back in the States. If a person was abroad and not working, then no taxes would have been paid nor a tax returned needed to be filed.

• How do people in that situation get around the need to have two years of tax return to buy a house?
• Also if you return and the first year don't make a lot of money, but revert to the norm the secon year, what are you suppose to do? Wait three years? 

---

That's up to the lender.  If I were in the lender's shoes, and you're telling me that you don't have last year's tax return, because you were out of the States and had no income...  How is that assurance that you would be able to pay your mortgage? (Sorry if it sounds a bit harsh).  If you had large investments or other assets that you could report during the year on your tax return, then that would be more appealing.  

If your income returns to its' norm during the second year, then you may have to wait three years.  Lenders are looking for proof of income/assets and assurance that you will be able to pay them back.  These are my thoughts on the matter.  Consult with a lender and they may be more lenient.

[Anonymous]

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@Stoneheavy wrote:

Waaaaaaaaay back in 2004 or 5, I can't remember, the IRS phone robot told me I owed over $900, which I didn't have, so I paniced and hung up and haven't bothered to file since.

Now my credit is really good and I want to buy a small house, so I'm gonna have to do something.  Should I just got to HR Block or someplace and tell them to file them all, or do I need a Tax lawyer or CPA or what?

From what I''ve read lately, if you go to the IRS before they have to come to you, they are pretty easy to deal with and don't really kick you while you're down, so I should make the first move.   I've never made more than 40K per year and don't have any investments or anything, so it would just take a bunch of 1040EZ's anyway.

---

I had a friend of mine that stopped filing when the IRS took his refund for a school debt some 25 plus years ago.... as far as I know he still has not filed. OTOH, another guy I worked with, had some moving expenses denied when he got out of the Navy, and the IRS started auditing him evey year, and basically made his life a living hell for 10 plus years. Both were just working class wage slaves like you and me.

My guess is, if they have not contacted you or sent you anything, or hit your credit reports with a tax lien, you're probably fine. Just visit a tax professional and get some advice on how to do an amended return for as far back as you can get data. 

BTW,   about that "IRS phone robot" - did you call them, or did they call you....

[Anonymous]

I was in a similar position and recovered from it.

I owed a lot in taxes and filed an extension, but never filed the forms.  I didnt file the next year, and then the next.

Somehow, the IRS didnt bother me.

I went to a national tax firm and set up having them fix it for me by filing.  They charged me almost 3k and did a horrible job, and did not interpret my responses to their questions correctly.  They had someone in NC that pushed my forms around and when I pointed out things that I did not want listed, they just stalled.  I objected to things like I had sold my residence in OH and relocated to FL and bought another residence for more than the old one within 2 months.  She recorded it as a capital gains and the tax was high, since I lived in the place in Oh for 24 years and it appreciated in price.   She was under review by her boss for poor performance and she submitted my forms to the IRS, saying I had given them a power of attorney. 

A couple years later, I hired a reputable firm and they cleaned up everything for me.  They filed amended returns for the old incorrect ones and filed new forms for the ones I didnt file.  It resulted in a more reasonable tax bill under 4k instead of over 40k and I make payments to the IRS every month now.   If you owe under 10k, they will allow you to set up an installment arrangement online and pay it off.  

Some important facts -

If you have no history of fraud or criminal actions with them and are an individual (or married filing jointly) , they will only be interested in the last 10 years.

They can get your last 10 years of tax documents sent to you, including W2s, 1099s, 1099c, and past tax filings.  When I did it, you could get it faxed to you or to a registered tax representative working on your behalf.  Now I think it is more restrictive because of tax fraud incidents. 

I had received some mail from the IRS but I filed it in the Ostrich drawer so I didnt look at it much.  I was extremely lucky and I do not advise doing that.

Ironically, 6 weeks after I hired the good tax firm, the IRS garnished my wages, even though I filed forms saying they were representing me.  I was a Federal Employee and it was very easy and quick for them to get the garnishment.  It took almost two months to get it released so I could start making payments to them.

If anyone is interested, PM for the name of the good tax firm.  I'm going to look to see if I can find the name of the bad tax firm too.

I would think a CPA that is a registered tax representative would be just fine to clear up your taxes.  I just paid them to prepare my tax forms and they would check with me and send them to me.  I would sign them and return them and they would file them for me.  I did not pay them to negotiate with the IRS for me, I just wanted to get them prepared correctly and filed.

If you are due a refund, you must claim it within 3 years of the due date or you forfeit it.

I had several years of penalties for 'not filing', filing late, and not paying the tax due.  I also have interest due.  I now have a tax bill of less than 2k.  I would have been clean as of 2013, except I got a 1099c for cancelled debt and had to cover the unexpected 'income' from it.

I am paying 50 a month to the IRS and hope it gets resolved after I file my 2015 taxes in March or April.  They will keep your refund and apply it to the past due amount.

HTH

[compassion101]

So the first important question is do you think you owed money these years, or were due a refund?

Where has your income been from, like a regular wage paying employment? Have they been taking taxes out?