This year is finally coming to a close, and 2017 is right around the corner. This means, for many people, setting out the inevitable New Year’s resolutions. They could be fairly standard, involving personal goals like working out more, losing weight, eating better or putting steps in place to secure a career achievement. Some people’s goals aren’t personal in nature, but are instead focused on financial matters. Common money-themed resolutions include contributing to a retirement fund, paying down debt or committing more income to savings.
A financial resolution for some people could be to become compliant and up-to-date with tax payments (including filing back taxes for years past or paying off tax bills). If you, for whatever reason, haven’t filed your business or individual tax returns for a few years, or have missed years here and there, it’s never too late to become compliant and get things back on track. Be aware, however, that the IRS won’t pay out refunds after three years have passed, even if you would otherwise have been due one. For example, if you failed to file a tax return in 2012 but you would have received one had you filed, you are probably just out of luck. You could also lose out on important credits and deductions if you wait too long to file.
Importantly, while there is a “time limit” on seeking refunds from the IRS, it is never too late for them to come after you for late payments. It is a long-standing practice of the IRS to generally not seek criminal penalties for filing late taxes when you are making a concerted effort to become current, but you must still contend with penalties and interest. Just because you can’t pay the full amount of any taxes due doesn’t mean you should avoid filing; that will only complicate the situation. It may be possible to work directly with the IRS to set up a payment plan or an offer in compromise, but these solutions are only available to you if you file your return and ask for them.
If you haven’t filed your taxes for past years, or you still owe back taxes that you haven’t been able to pay, there are options available to help you get back on track. Working with a local tax attorney – particularly one who is also an accountant and has the specialized knowledge necessary to evaluate your situation from a number of different angles and find the best possible solution – is vital for the best resolution.