I haven’t paid my taxes in three years. What do I need to do?

by Gregory Paulding, CPA | Jun 12, 2019

askacpaiconI haven’t paid my taxes in three years. What do I need to do?

Your question suggests that you have filed, but not paid your taxes. However, I will answer this as if you have not filed either. You’re still within the statute of limitations to get any overpayment refunded to you, but your question suggests that you may owe for all three years. It is important to file because the IRS has the authority to file a return on your behalf using information that it has and to assess you additional penalties and interest. Here is what I recommend that you do:

  • Prepare the returns yourself or have a qualified preparer do this.
    (These should be electronically filed.)
  • Pay any liability that you can, and identify the payment for the earliest tax year.
  • Wait for the IRS to send you notices of any remaining balances.
  • Call the IRS to set up an installment arrangement for the collective balances, or have your preparer do this on your behalf.

Do the same for state and local returns. Becoming compliant sooner rather than later will go a long way with the IRS. This is common, so don’t get overly anxious through this process.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Gregory Paulding, CPA, is president of Paulding & Associates PC in Erie, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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