I have unfiled back tax returns, should I file my current return first and worry about the older ones later?

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If you have one or more years of unfiled tax returns, you need to take care of the situation as soon as possible.

The IRS doesn’t care about why you didn’t file your tax returns. They only care that you didn’t. They will impose criminal and civil penalties on anyone who doesn’t file their taxes. Getting your unfiled taxes sent in as soon as possible helps you avoid criminal charges and mitigate the civil penalties.

Potential Charges

The IRS can file federal criminal charges against you for not filing your taxes. That means an agent can show up at your home or your business and take you away in handcuffs. You could face up to a year in prison for every year you didn’t file. You could also be assessed a financial penalty of up to $25,000 for each year.

On the civil side, you will face financial penalties and interest on the back taxes you owe.

How to Handle the Situation

The most important thing you can do is file your past tax returns. Tax experts recommend filing your oldest year first. Then, wait a few days, and file next year. Wait a few days, and do the next. Keep doing that until filing all your returns.

Why stagger sending in each year’s return? The IRS system is less likely to flag your account if they don’t receive all your returns at once. Sending in different years of returns in a single package or all on the same date is more likely to raise a red flag and get an agent’s attention.

Getting your non-filed returns into the IRS does not stop the civil penalties and interest. But, it will be one less thing you need to worry about while working to resolve your IRS problems.

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