What if I haven't filed my taxes?
Authored By: Southeast Louisiana Legal Services (Hammond Office)
Southeast Louisiana Legal Services
Low-Income Taxpayer Clinic: Free Legal Help for Federal Tax Problems
(504) 529-1000 ext. 225
What if I haven't filed my taxes?
What happens if I haven't filed my taxes?
Not filing taxes is a crime if you owe taxes. The Internal Revenue Service ("IRS") has up to 6 years to prosecute for most federal tax crimes and 3 years for less serious federal tax crimes.
But most of the time the average citizen does not get prosecuted for non-filing. The IRS tries to resolve most "non-filer" cases through the IRS civil process, especially if the taxpayer files their back tax returns. The IRS is more interested in getting its money than in putting you in jail.
Will the IRS charge me more because I haven't filed my taxes?
Yes. Typically, you will owe penalties and interest as well as the back taxes.
What if I owe too much for me to pay?
In this case, there are several options for moving forward. The Low-Income Taxpayer Clinic can help you decide the best plan for you.
1. Installment Agreement: We can help you set up a payment plan with the IRS so you can pay down your debt in smaller amounts.
2. Offer-in-Compromise: We can help you apply for an agreement to settle your tax debt for less than the full amount owed.
3. Currently Not Collectible: If you are able to prove to the IRS that you are in financial hardship (your necessary monthly expenses are more than your income) you may be able to ask for "currently not collectible" status. Once the IRS has given you this temporary status, they stop all collection activities.
The IRS will not consider an Installment Agreement or an Offer-in-Compromise until you have filed all your tax returns.
You might be eligible for some tax credits or refunds!
For the years that you haven't filed, you may have missed out on tax credits (money or refunds). If your family makes a low to moderate income by working, you may have been eligible for Earned Income Credits. Even if you haven't filed, you may be eligible for these credits or refunds for the past 3 years. It may cut down or wipe out the taxes you owe if you file before 3 years have passed. To get the 2007 tax credits, you must file by April 15th, 2011. If the amount of your credits is more than the taxes you owe, the IRS may even owe you money.
What assets and income can the IRS take for old tax debts?
- Bank account funds
- Some parts of your wages
- Social Security (up to 15%)
- SSI (up to 15%)
- Public Assistance (up to 15%)
- Some parts of retirement accounts
- House (only if your debt is greater than $5,000)
The IRS has the right to almost all property. But it typically takes bank account funds and wages first. A larger amount of your wages will be protected from IRS seizure if dependents lived with you. If your debt is larger than $5,000, the IRS has the right to take your house. However, IRS policy discourages its officers from taking homes or retirement accounts if the debt can be settled some other way.
Where can I go for help?
The Low-Income Taxpayer Clinic can help you decide how to move forward. Call our office to set up an appointment to discuss your situation. If you have received anything in the mail from the IRS (notices, letters, etc.) please bring them with you to your appointment. Please also bring any tax returns you have, as well as information on your current income and any bankruptcies filed.
The Low-Income Taxpayer Clinic is run by Southeast Louisiana Legal Services. The Clinic serves low-income taxpayers who have disputes with the IRS. The Clinic is nota part of the IRS or the Louisiana Department of Revenue. All conversations with our attorneys and staff are confidential. All services are free.
Louisiana Low-Income Taxpayer Clinic
Call (504) 529-1000 ext. 225
(if long distance, call toll-free at 877-521-6242)
For Vietnamese: (504) 529-1000 ext. 4
For Spanish: (504) 529-1000 ext. 239
This is not legal advice. This document has been prepared for general information purposes only. Legal advice depends on the specific circumstances of each situation. Also, the law may vary from state to state, so that some information may not be correct for your state.