Young and Stupid -- Haven't filed tax returns in seven years...

Feb 19, 2008 9 Replies

I ran into a situation. A relative of a friend of mine is a young lady who frankly just doesn't have her stuff together. She isn't very responsible in her behavior. It seems that she hasn't filed a state or federal tax return ever. She has always just thrown every document she has gotten away in the trash. Couldn't be bothered with paper.. its too difficult to keep track of that stuff. She's had numerous jobs most of which I'm sure were paid via paycheck.



She has no clue if she gets money back or if she owes money to either US federal govt. or state.



Questions: --What is likely to happen in her future if this continues? Will somebody come knocking on her door someday? If so, who? and when?



--Is there any way to clean this up? How does one go about re- creating all of the annual income statements? My thoughts are she will have to go back to her employers and ask for W2's from history. How far back should she go if she is serious about cleaning this mess up? Has anyone ever tried to get copies of W2 forms on file with the IRS (where no income tax return was filed?)



Looking thru old google cache, I did find this:


1.6 IRS Procedures: Copies & Transcripts

The quickest way to obtain a copy of a prior year Form W-2 (PDF) is through your employer. If that is not possible, you can order and pay for copies of your entire return (attachments include Form W-2 (PDF)) from IRS, or order Form W-2 (PDF) information at no charge from the IRS. The IRS can provide Form W-2 (PDF) information for up to 10 years. Information for the current year is generally not available until the year after it is filed with the IRS. For example, Form W-2 (PDF) information for 2005, filed in 2006, will not be available from IRS until 2007.



To receive a copy of your return or transcript, complete and mail Form



4506 (PDF), Request for Copy of Tax Return or Form 4506-T (PDF) Request for Transcript of Tax Return. You should allow 60 calendar days for a response.


Has anybody been here before? How would you advise my friend's niece? (Or should I just run away, fast?)



thanks, Zip


Lots of folks have been here before. She can run, but she can't hide forever, though if her W-2 earnings and withholding are such that she would not owe any tax, there may never be a systemic pursuit of her delinquent returns. Absent fraud, IRS generally won't solicit delinquent returns more than six years old.

If she can't or won't do this by herself, she can hire an EA or CPA to do it for her. Go to the nearest IRS office, request IRPTR transcripts (described further here:

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for the past six years. These will be available to her within one to two weeks after request, and will show W-2 and 1099 income and withholding reported to IRS by her employers. If the IRS person working the counter doesn't understand what she needs, speak to a supervisor who does. While there, get blank Form 1040s and instructions for the past six years. Get the required blank state tax forms and instructions from her state tax agency. Try to get 2007 W-2s from 2007 employers as they probably won't be available via the IRPTR route until late in 2008. Prepare returns. If they show refunds or tax due that she can pay, file and pay them. If they show tax due that she can't pay, and she has not done so already, she should immediately retain a competent tax professional to advise and represent her.

She can file amended returns for the last 3 years, Since today is

2/19/2008, I think she can file amended retrurns for 2004 (due date was 4/15/2005, so last day to file an amended return for 2004 is 4/15/2008), 2005, 2006. Be aware that there may be a limit on the refund due to the "the credit or refund cannot be more than the part of the tax paid within the 3-year period (plus any extension of time for filing your return)" rule.

She cannot file amended returns because she never filed returns in the first place. There is nothing to amend. She can file original returns going back as far as she likes, but if they show refunds, she will only get the refunds for

2004 and later (and for 2004 only if filed by April 15, 2008). Any earlier refunds are lost.

The OP said she is young, but he didn't say how long she has been working and not filing. If she is very young, maybe the problem doesn't go back many years.

Bob Sandler

To add a thing or two here....

The IRS may have already produced substitute for returns (sfr) based on third party (employer, bank etc) reporting.

There may be statute of limitation issues getting refunds for old years if there are sfr's in the system.

If there are no sfr's or other IRS notices, the IRS will deal with you less harshly if you come forward before being contacted by the IRS.

... Then there will likely be state tax issues to deal with

Probably better to have a CPA or EA help you here.

___________________________________

-----> real address on hobokeni or hobokenx

will probably take forever to get any information from YAS and in the end, the returns won't get mailed out.

I may be too cynical but the previous non-filers I had to deal with spoiled it for all the other "Good" non-filers.

========================================= MODERATOR'S COMMENT:

True. Does she recall ever seeing a letter from the IRS?

If she's never filed, she's probably not in their system (as a taxpayer). I never saw an SFR case for someone who had never filed in his/her lifetime.

Irrevelent. SFR's don't start any periods of limitation. The 3 year rule (from the due date) for claiming a refund still applies.

That much is certain. ;-)

I know a guy who did something like this (me). About 42 years ago, I started to fill out my tax returns on the last day before the deadline and couldn't find my tax papers. Since filing the next day would be late, I was afraid I would be in trouble for filing late so I didn't file at all. This went on for about 15 years. I think about the 13th year, I received a letter from the IRS about filing my taxes. I ignored the letter and didn't hear anymore. After the 15th year, I married a woman that had always filed her taxes. She didn't know about my situation and I didn't tell her. When tax filing time came around, I filed jointly with her and although I did a lot of worrying everything went through fine. It is now 25 years since I started filing again and have never heard a thing from the IRS about it. I divorced her after 11 years but kept on filing every year. If I hadn't of married her, I probably still wouldn't be filling unless they would have eventually came and hauled me in.

You should be able to file prior year taxes. Some online filing resources even offer to do prior year returns for free.

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She can obtain copies of her Forms W-2 and 1099 from IRS for no charge. The copies IRS will furnish do not include any state tax information however.

As of May 19, 2008, IRS began maintaining 9 years of information returns, i.e., Forms W-2 and 1099, on its Information Returns Masterfile. Currently, years 1999 through 2007 are available. The easiest way to request copies is to submit a Form 4506-T. She will need to sumit multiple copies of the form for the number of years data she needs. Up to three years can be requested on one form.

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For information return transcripts, she needs to check the box to the right of line 8.

She also probably needs to complete an IRS Form 8822 to request IRS update her address.

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If and when she gets this far, tell her to take the transcripts to a local CPA or EA.

Condor

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