In its effort to collect more than $400 billion in overdue taxes in recent years, the IRS has been more aggressive about enforcement.
That includes pursuing back taxes for many years beyond the normal statute of limitations.
If you have unfiled taxes, the last thing you want is the IRS going back decades to collect them. But how far back can the IRS go for unfiled taxes? Is there an IRS statute of limitations for back taxes?
Read on to learn more.
What is the IRS?
The Internal Revenue Service is responsible for collecting taxes from individuals and businesses. The agency has the authority to go back as far as 10 years to collect unpaid taxes.
If you have unpaid taxes from previous years, the IRS may levy your wages or assets, or file a notice of federal tax lien. The agency may also charge you interest and penalties on unpaid taxes.
How Far Back Can the IRS Go For Unfiled Taxes?
When it comes to unfiled taxes, the IRS typically has a three-year window during which it can choose to audit a taxpayer.
If the IRS believes that you have willfully failed to file or evade your taxes, it can go back as far as 10 years.
Additionally, if a taxpayer has not filed a tax return at all, the IRS can go back as far as it needs to in order to collect any unpaid taxes.
The Consequences of Not Filing Taxes
The consequences of not filing taxes can be very severe.
The IRS can charge you interest and penalties on the money you owe, and they can also file a lien against your property or garnish your wages. If you don’t file your taxes, you could end up owing the IRS a lot of money.
If you have received an IRS 30 day letter, it is important to request a consultation as soon as possible to know what to do next. The sooner you file your taxes, the less money you will owe in penalties and interest.
What to Do If You Can’t Afford to Pay Your Taxes?
If you owe taxes and can’t afford to pay them, you should contact the IRS immediately. The sooner you contact them, the better.
However, there are several options available to taxpayers who can’t afford to pay their taxes. The IRS may be able to work out a payment plan or offer an offer in compromise.
Taxpayers should explore all options before deciding what to do.
How to Avoid Having the IRS Go Back Too Far For Your Taxes?
If you have unpaid IRS taxes from a previous year, the IRS may begin taking enforcement action to collect the money you owe. The sooner you pay your past-due taxes, the less interest and penalties you will owe.
If you can show that you have made a good faith effort to pay your taxes, the IRS may be willing to waive some penalties.
How to Avoid Penalties?
If you’re behind on filing your taxes, it’s important to catch up as soon as possible. How far back can the IRS go for unfiled taxes? The IRS can go back as far as 10 years to collect unpaid taxes.
Catching up on your taxes can help you avoid penalties and interest, which can add up quickly. So if you’re behind on your taxes, don’t wait any longer – file today.
Ready to get a fresh financial start? Need more tax help? Browse our other blogs to know more.
