How To Avoid Mistakes With IRS Expat Back Tax Filing

Back Tax Filing – Quickest Way Out Of Tax Trouble

If you haven’t filed your taxes in a few years, you may be wondering what back tax filing options you have. Filing your back tax returns is the quickest way out of tax trouble. Here’s six reasons for taking control of your back tax filing:

Reason 1: File All Tax Returns

File all tax returns that are due, regardless of whether or not you can pay in full.

Reason 2: Reduce Interest And Penalties

By taking care of your back tax filing by filing your past due return and paying the taxes due will limit interest charges and late payment penalties.

Reason 3: Claim A Tax Refund

If you don’t address your back tax filing, you risk losing your refund if you don’t file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date.

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Reason 4: Protect Your Social Security Benefits

If you are self-employed and do not file your federal income tax return, any self-employment income you earned will not be reported to the Social Security Administration and you will not receive credits toward Social Security retirement or disability benefits. In addition, if the IRS has filed a substitute tax return (SFR), the IRS can garnish a portion of your benefits until the tax debt is repaid.

Reason 5: Avoid Issues With Your Credit Score

If you don’t resolve your back tax filing, your credit score will likely be negatively affected. Loan approvals may be delayed or denied if you don’t file your return. Copies of filed tax returns must be submitted to financial institutions, mortgage lenders/brokers, etc., whenever you want to buy or refinance a home, get a loan for a business, or apply for federal aid for higher education.

Reason 6: There Are Options To Repay Your Tax Due

If you owe more than you can pay and cannot pay what you owe, an installment agreement request can be made to repay your tax debt monthly.

Substitute For Return (SFR)

If you fail to take care of your back tax filing, the IRS may file a substitute return for you. This return might not give you credit for deductions and exemptions you may be entitled to receive. It is likely that you may end up with an assessed tax that is higher than what would result by filing your delinquent tax returns.

The IRS will send you a Notice of Deficiency CP3219N (90-day letter) proposing a tax assessment. You will have 90 days to file your past due tax return or file a petition in Tax Court. If you do neither, the IRS will proceed with their proposed assessment.

If the IRS files a substitute return, it is still in your best interest to file your own tax return to take advantage of any exemptions, credits and deductions you are entitled to receive. The IRS will generally adjust your account to reflect the correct figures.

IRS Collection and Enforcement Actions

The return the IRS prepares for you (with the proposed assessment) will lead to a tax bill, which, if unpaid, will trigger the IRS collection process. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien.

If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and/or criminal prosecution.

Help filing your past due return

For back tax filing help, please click on the button below for a free, no obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation regarding your back tax filing further:

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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.