admin
21 Comments
Oct 10, 2012
The IRS has ten years to collect your money, but you’ve only got three years to claim your refund
In a sentence, here are the important statutes of limitations to keep in mind when you file late taxes: the IRS has three years to give you a refund, three years to audit your return, and ten years to collect any taxes you owe them.
Three years to get a refund
The good news is that you can still get a refund for three years after the original due date of your return. This means that on April 15, 2013, you will still be able to get a refund for 2012 (current year), 2011, 2010, and 2009 taxes. But after this deadline, you won’t be able to get a refund for 2009 taxes anymore.
Old refunds are a huge reason to file back taxes. In fact, a higher percentage of late filers get a refund than current filers. Plus, failure to file income tax only results in penalties and interest if you owe money. So if you’re due a refund, there’s no downside to doing your taxes.
Three years to audit
Unlike the three year statute of limitations for refunds, which starts on the date that the return was originally due, the three-year statute of limitations for audits starts on the deadline or the date that you filed your return, whichever is later. The big exception here is if the IRS suspects fraud, in which case they can go back more than three years.
Ten years to collect taxes you owe
You should know that this ten-year statute of limitations does not start from the date that the tax return in question was due, but rather from the date that the taxes are assessed, generally the date you file the late tax return. What does that mean? You can’t hope to lay low and avoid the IRS for a decade and then get out of paying taxes scott-free. Not only would that be highly improbable, but the statute of limitations wouldn’t even apply to you in this situation.
Filing back taxes on the state level is very similar. Most states follow the same timetable as the IRS, though there are some exceptions. The safest thing to do is check with your individual state’s tax authority. If you owe money you should expect to pay interest and maybe even a penalty. Again, check with your state because on the state level there are fifty different rules for dealing with late taxes.
Lots of people immediately assume that filing back tax returns is complex and punishing, but that’s not necessarily the case. Really the same rules apply to late taxes that apply to current year taxes.
If you have a really complex return with lots of moving parts, then it probably makes sense to consult a CPA or tax accountant. But if your returns are relatively simple, you’ll be just fine filing online. In fact, there are many sites, like PriorTax, that specialize in prior years’ tax return filing.
Photo via http://www.planetofsuccess.com/blog/ .
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21 Responses to “How Far Has the State Gone Back for Failure to File Taxes?”
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Comments(21)
Steve Vescovi
Nov 22, 2012
I have not filed my taxes in 8 years and the irs sent me a letter and it said i owe them
$1,5000 dolars for back tax payment,can i file taxes for 2009,2010,2011 and have
them deduct the amount i owe and send me payment of the balance owed to me ?
thanks for your help!
admin
Nov 26, 2012
Hi Steve,
The answer to your question is maybe. After you file your 2009, 2010, and 2011 returns (if you are in fact due a refund) you can try calling the IRS and asking them if they can apply these refund amounts to what you owe them. This is not something that automatically happens and is completely up to the IRS.
Remember, you can file your 2009, 2010, and 2011 taxes right here on PriorTax.
M shed
Oct 7, 2016
How long can a state still collect on an old state tax.
admin
Oct 14, 2016
Hi M,
Federal rules are more standardized than state laws on tax. Different states have different rules so it will depend on the statute of limitations for your state. I suggest contact the state taxation office for the state you are referring to. You can simply inquire about the statute of limitation rules and they should be able to assist.
Tina Jeffery
Jan 14, 2017
I had audits for 2013 & 2014 I paid what I owed to federal. Just received notice I might owe money to State? I live in California. This is confusing to me , I thought I paid everything?
admin
Jan 17, 2017
Hi Tina,
It is possible that you owe for the state even though you paid federal. Federal taxes are controlled by the Internal Revenue Service (IRS) but each state has their own Revenue and Taxation Department. Your federal returns are received by the IRS while your state returns are received by the California State Franchise Tax Board. It can get a bit confusing, especially if you electronically filed your returns and didn’t realize they were going to separate entities. If you are having trouble determining if you owe state tax, you can contact our team of tax experts and they will be able to assist you.
Rose Keith
Jun 1, 2017
How far can the state of Utah go back to retrieve taxes?
admin
Jun 1, 2017
The statute of limitations for the Tax Commission to assess and collect any outstanding balances does not start until a return has been filed.
Utah requires that collection is made within 10 years after the date of assessment.
Lee
Jun 6, 2017
How long does the state of Kentucky have to collect back taxes?
admin
Jun 6, 2017
The Statute of limitations for the collection of unpaid Kentucky State taxes is 10 years.
Lee
Jun 6, 2017
Thank you much! Thats what I found and was checking on it!!
Doug l Lacefield
Jun 6, 2018
I have not filed Federal or state taxes since 19 90. They suspended my driver’s license about 5 years ago for owing taxes. I am a disabled veteran on a fixed income and will never be able 2 pay them the taxes I own them and now I can’t drive on top of that what should I do?
Larry
Aug 21, 2017
I recently got an Audit from the state of Utah telling me that I didn’t file state taxes for 2012. I know I filed my taxes and I was sure I got a refund from my federal taxes that year. I was told that I needed to file my taxes again for this year or I would owe 485 dollars plus interest for the 5 years that it took them to figure out that they didn’t have a tax return for me for that year. Not sure how this is fair since I tried to get my Federal tax returns sent to me for the 2012 and they only have the 2013 available online. Not sure what I need to do. Do I just file again and pay a big interest fee or do I try to get my federal tax papers to show I did in fact file and that they are at fault?
admin
Aug 22, 2017
You may have filed your federal income tax return for 2012, but not your state tax return. If you are certain you filed your 2012 state return, it is best for you to contact the tax professional or company that prepared the return for a copy. Once obtained, you can mail this document to your State Department of Revenue as proof that you previously filed the return. If there is no record of you filing a state return for 2012, you should comply with the conditions of your audit.
Doug
Feb 28, 2018
I haven’t filed state or federal income taxes since 1990 can they still collect? Also the state of Kentucky suspended my driver’s license about 5 years ago because I hold back taxes what can I do about that?
admin
Apr 2, 2018
Doug,
State laws differ from one another. Contact your state for further details and instructions.
Kim
Mar 10, 2018
I recently got a letter stating I owe the state of Missouri for taxes not filed in 2003…. I do not even remember who I worked for in 2003, is this past the state statue of Limitations
admin
Apr 2, 2018
Kim,
Perhaps the safest thing to do is check with your state’s tax authority. If you owe money you should expect to pay interest and maybe even a penalty. Check with your state department of revenue for more details and instructions.
Bula Zaino
Mar 31, 2018
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Lynnette
Nov 12, 2018
Ronaldleebrown2@Yahoo.com
How long can Utah collect back taxes? Is it 10 years like federal taxes?
Dennis Homant
Sep 27, 2022
It is September 2022. I just received a notice from the state of Michigan regarding my Schedule C on my federal form for 2018. Can they do that?