If you haven't filed your taxes in a few years, you are probably hearing the horror stories that other non-filers have experienced. Penalties, fines, and even jail time are but few of the consequences for not filing your annual taxes. In fact, you are probably experiencing some trouble with the IRS as of this moment. You are probably receiving notices from the IRS requiring you to settle your dues now. Before you make matters worse, you might want to act on this tax obligation now. But what is probably the best thing to do when you have not been filing your tax returns for several years now? You are essentially setting yourself up for a big IRS problem.
It's an undeniable fact that you must file all un-filed tax returns, in the first place. This must be done even if you are not financially stable to pay for all the penalties, fees and other charges. In the rare instance when you are in fact entitled to a refund rather than penalties, you still have to move quickly. Otherwise, this benefit will be lost if you don't attend to this matter right away.
Depending on your specific circumstance, consequences for not filing your taxes may vary. If you are a non-filer, setting your records straight will not only get you back in your financial track, it'll also prompt the IRS to stop enforcing penalties on you. In fact, many people who haven't filed tax returns don't really owe the IRS anything. They simply did not file because they didn't have the time or did not have the needed background. As a result, the simple excuse is now a major legal battle.
When you've come to terms with the fact that there's a need for you to file your taxes, it's always best to seek assistance from a tax professional. He/She will be able to effectively direct you through the web of tax filing and through IRS issues, should new ones arise. In fact, he/she is likely to have helped others who were in the same situation as yours.
In meeting with your tax professional, be certain that you bring as much information as you can. He/She will be the one to check which documentations are more useful than the others. Examples of these forms are your W-2's, 1099's, receipts or supporting documentations for certain expenses, social security numbers of your dependents and a copy of the last tax return that you have filed with the IRS. Your tax accountant must have access to all of these. In effect, it will be less taxing for him to reconcile your tax records.
Filing your past tax returns as soon as possible will largely affect your rights to a refund and your benefits from the Social Security. A refund may be received only if you have filed for the corresponding taxes within a three-year period. Beyond this period, your right will be forfeited. Essentially, this is like giving away your money to the IRS. If you have failed to file a tax return and are self employed, then you won't receive credits that will be carried over to your Social Security retirement or disability benefits. The IRS will have no record of your taxes so they can't report your earnings to the Social Security, thus, you won't be given tax credit.