Last Chance for Refunds on Late Returns

This post is in: Real Estate


This past Tuesday at our USTaxAid Services meeting, all of the CPAs compared trends we were seeing. There were a couple trends, but today I want to focus on a big one.

We’re all seeing people coming forward who hadn’t filed their past year returns.

Cyndi said she’d heard from five non-filers who wanted to come clean in just two days. Richard said he’d heard from two over the past week. I know I talked to a couple myself.

There are a whole lot of reasons about why the non-filers are coming forward now. Maybe it’s because the IRS sent them a notice. Or maybe it’s because they want to get a loan or are applying for a state license of some type. Or maybe they want to rent a commercial space for their business. Or maybe it’s just because they are tired of being afraid of that knock at the door. Because they know that the IRS will find them… someday… eventually… and they’d rather get honest without having the IRS breathing down their neck.

If you haven’t filed for a few years, then this blog today is for you. If you know someone who hasn’t filed, please send him or her a note about the article. This is an important message for anyone who hasn’t yet filed with the IRS.
If you haven’t filed your 2007 federal income tax return yet, you have until April 17, 2011 to do so. If you meet that date and the IRS owes you a refund, you’re going to still get it. If you wait past that date, you won’t get it.
Now, if you haven’t filed 2008 and/or 2009 yet, they will credit the refund until they receive those returns, but at least it isn’t lost.

One of the biggest mistakes you could make right now is not file for 2007 and have a big refund coming and let this deadline pass you. A lot of people think that because it was a tough year economically and they know they don’t owe anything, that it doesn’t matter. But you actually may have a refund and may have money coming back due to the Earned Income Tax Credit.

But, you must have your return in the mail and postmarked by April 17, 2011. And like any other mailed correspondence to the IRS, we strongly urge you to send it in return receipt requested.

There is one more powerful reason to file now. Either the IRS or state revenue department has found that you haven’t filed or they haven’t YET found out. If they have found out, the sooner you get in compliance the better for you. If you have a refund coming, you’ll be able to get that refund. If you owe money, it’s better for you to come clean, even if you don’t have the money to pay, because you’ll have a better chance at getting some penalties reduced and negotiating a settlement and/or payment plan. If you don’t file and the IRS catches you and you still don’t file, they are going to file for you. And that means they will count all of the income items they can find and none of the deductions. The burden of proof is now on you to prove they are wrong. This is very different from you first filing and having them challenge an item. Tactically, you want to be the first to file.

So, summing up today’s article:

If you have past due returns, file them quickly.

If you have a refund coming from a 2007 federal income tax return, you need to file by 4/17/11 to receive that refund in cash or credit.

If the IRS catches you (and they eventually will) and you haven’t file, you could face significant penalties, more tax and even jail time.

Give us a call. We can help. We’re at 866.829.2368, ext 1 for Richard and ext 2 for Thomas.


  1. Joseph Laine says:

    My 2007 1040x return was filed on 4/18/11 the due date for 2010 tax returns.
    Received a rejection notice of my refund from the IRS because the 2007 1040x was not filed on 4/15/11

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