How Long Can the IRS Pursue Unfiled Tax Returns?

When it comes to taxes, many people worry about the statute of limitations, especially if they haven’t filed a tax return. While this should be the least of their concerns, considering the many possible consequences of unfiled tax returns and even back taxes, it’s crucial to understand how this works to avoid any surprises down the line.

What Is the Statute of Limitations?

The statute of limitations is a legal timeframe within which the IRS can take action on your tax situation. For most situations, this period is generally three years from the date you file your return. However, the rules change when you haven’t filed a return at all.

No Time Limit for Unfiled Tax Returns

If you haven’t filed a tax return, the IRS does not have a statute of limitations for assessing and collecting taxes. In simple terms, this means that there is no deadline by which the IRS must stop pursuing unpaid taxes. They can come after you for those taxes indefinitely.

What Happens After You File?

Once you file a tax return, the typical statute of limitations of three years begins. This is the period during which the IRS can audit your return, assess additional taxes, and take action. However, if you significantly underreport your income—by more than 25%—the statute of limitations extends to six years.

Special Cases (When the statute of limitations do not apply)

• Fraud: If the IRS suspects you’re committing fraud, there’s no time limit. They can pursue you for taxes indefinitely if they believe you’re deliberately avoiding payment.
• No Return Filed: If you don’t file a return, the clock never starts. The IRS can come after you for unpaid taxes whenever they want.
  
  

Final Thoughts

Knowing these timeframes can help you make informed decisions about your tax obligations. If you have unfiled tax returns, it’s wise to address the situation as soon as possible. The longer you wait, the longer you risk facing potential issues with the IRS.

If you’re unsure about your tax situation or need help filing your returns, you may call us at (305) 564-9199 or fill out our website contact form to schedule a free and confidential consultation.