How to Get Back into the System After Failure-to-File

Failing to file your tax returns is a serious (intentional or inadvertent) oversight that will assuredly get you attention from the IRS. However, failure-to-file is not an uncommon issue for many American taxpayers. If you have found yourself in this situation, know that you do have control over what happens next, but it will take some effort and due diligence on your part. 

Penalties for Failure-to-File

Before taking action, you need to reckon with any financial penalties assessed by the IRS. Not filing a tax return in which you owe money warrants two penalties: failure-to-file and failure-to-pay. The penalty for failing to pay is 0.5 percent of your unpaid tax obligation per month, while the failure-to-file penalty is five percent – 10 times the FTP amount. This is why it is highly recommended that you always file your tax return, even if you are certain that you will not be able to pay. 

Step 1: Contact the IRS to confirm the past years for which they expect a tax return to be filed. IRS Policy Statement 5-133 generally mandates that tax returns for the past six years must be filed in order to get back in the IRS’ good graces. If you have fewer than six years’ worth of outstanding tax returns, your first order of business should be filing your delinquent tax returns as soon as possible. 

For seven or more, though, you should call and ensure that they are only looking for returns for the past six years. Again, you should file returns regardless of your ability to pay. 

Step 2: Get more information from the IRS. It is likely that the IRS filed a substitute for return (SFR) in the years you neglected to file a return. This substitute form is unlikely to have many deductions or credits claimed. When you file old tax returns, the IRS will compare your returns to the SFRs they created. You should try to get information on any SFRs, as well as any other forms the IRS has on record for you. 

Step 3: If you can’t pay, ask for an installment agreement or other leniency program. After you are caught up on filing, you may then concentrate on paying penalties, interest, and other obligations. Fortunately, the IRS offers several arrangements for taxpayers (who have filed all returns) to pay down their tax burdens.


If you are feeling overwhelmed after not filing tax returns for multiple years, call our firm to get started on a plan to take back your future. You are NOT beyond hope. For legal help in regaining your good standing with the IRS, contact our firm by phone today at 909-579-2233.