What Happens If You Haven’t Filed Your Tax Return?


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This past week I received two notes from people starting over. One person has lost all of their property and their money but they don’t have the energy to start again. They’ve been stuck for years and can’t seem to move past.

The other email included a question through USTaxAid.com, which I’ve promised to answer through blogs.  So here goes:

First, the question:

I desperately need to talk to you about my problems.  (The) IRS file(d) 2007 and 2008 on my behalf. (Tax) plus interest up to $200K after my divorce.

Just got a job for about 6 months and States Tax is Garness (sic) my pay check $50 every two weeks. I have file(d) BK 3 to 4 years ago. I have lost most of my docs after divorce. I paid child support but docs.

Answer: I’m not sure I understand all of the details. It sounds to me that the writer did not file tax returns for 2007 and 2008. The IRS then filed returns. They report all income and don’t report any expenses or deductions.

The taxable income will be much higher than if you had filed. The penalties and the interest will be higher. And the IRS is not in the mood to deal.

Depending on when these returns were filed, it may still be possible to go back and correct them. You’ll need an experienced CPA to help you out with that.  You may also be able to renegotiate an offer in compromise. You can do this yourself, but you’ll probably have better results if you get a tax pro to help you.

If you don’t have your back-up support for deductions, you can probably get those through your banks and credit card companies. It will take some digging and a whole lot of effort, but there is something you can do.

The fact that you filed bankruptcy probably doesn’t have any impact on this situation

Morale of the Story:  If you have an IRS or state tax problem, you have to get in front of it. The longer you take, the worse it will be. If you think the IRS is going to forget and just go away, guess again. When they find you, and they will find you, you may face taxes, penalties and interest like this writer did or you may even have a jail term.

Get help right away. Don’t ignore an IRS issue.



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