How Far Back the IRS Can Go for Unfiled Taxes

It all started with that one missed tax return. You forgot to file one year, and you spent the next few months worrying that the IRS would come knocking. Much to your relief, it never did. 

You wondered if the IRS would ever notice those unpaid taxes. Tempting fate, you skipped next year’s tax return and the one after that. Nothing has happened yet, but you’re afraid that the house of cards will come crashing down any day now.

How far back can the IRS go for unfiled taxes? Discover the answer, plus a few ways to extend the statute of limitations on unpaid taxes, below.

How Far Back Can the IRS Go To Collect Unpaid Taxes?

The IRS generally has 10 years from the date it assesses your taxes to collect those taxes, interest, and associated penalties from you. This 10-year period is called the Collection Statute Expiration Date (CSED). After 10 years are up, the IRS will forgive outstanding tax debt.

However, the CSED only applies to tax returns that the IRS has assessed. If you never filed a tax return, in theory, there isn’t any limit to how far back the IRS can go. Even so, the IRS usually only goes back for about six years (except in cases of fraud or serious tax evasion).

How Far Back Can the IRS Audit You?

If the IRS wants to audit you, it has three years from the date of the tax return to do so. The statute of limitations can be longer if:

  • The IRS suspects you of fraud
  • You made serious errors on your taxes
  • You failed to report more than 25% of your gross income

Haven’t Filed Taxes? Here’s What To Do

Now that you know the answer to, “How far back can the IRS go for unfiled taxes?” here’s what to do if you’re ready to make things right.

If you’ve neglected to file taxes for any amount of time, the smartest thing to do is contact the IRS. Doing so will give you a better idea of any failure-to-file and failure-to-pay fees the IRS might charge.

Note that the IRS doesn’t charge a failure-to-file fee if you can claim a refund. However, you risk losing your refund if the deadline has passed. To collect a refund, you must generally file your return within three years of its due date.

Extending the Collection Statute Expiration Date

What if you’ve filed your income tax return but can’t afford to pay? You have a few options for extending the CSED. They include:

  • Filing for bankruptcy
  • Filing an offer in compromise (an agreement to settle your tax debt for less than what you owe)
  • Making a collection due process appeal
  • Applying for a Taxpayer Assistance Order (TAO)

If you file an offer in compromise, the CSED is extended for its duration, plus 30 days. If you file for bankruptcy, the CSED is paused during bankruptcy proceedings. After that, you have six months to pay what you owe.

Another option, albeit one that’s out of reach for many people, is to move out of the country temporarily. The IRS will suspend the CSED for any resident who lives out of the country for more than six months.

Struggling With Unfiled Tax Returns? Call Levy & Associates

How far back can the IRS go for unfiled taxes? Theoretically, the IRS can go back indefinitely, but it usually only looks at the past six years.

If you have unfiled taxes and aren’t sure what to do, call Levy & Associates at (800) TAX-LEVY for a consultation.

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.