Are you among an estimated 7 million ‘non-filers’ in the USA? If you are, I’ll share bad news and good news. But first let’s look at the term non-filer:
Definition of a Non-Filer
According to Farlex Financial Dictionary (2009, accessed June 21, 2020),
“A non-filer is a person or corporation who does not file a tax return by the required date. In general, a person who has filed taxes once must continue to do so for the rest of his/her life (or existence, if a corporation).”
Let’s break that down a bit:
- You’re a non-filer if you didn’t file in 2018 but did in 2017
- You’re still OK if you haven’t filed for 2019; the filing date was moved to July 15 2020 due to coronavirus
- You’re a non-filer if you haven’t filed federal taxes in ten years (or 2-9 years for that matter) but did for some prior year(s), as required.
- You’re a non-filer if you’ve never ever filed taxes (and were not exempt from filing).
As you might imagine, the longer it’s been, the more complicated it can be to get caught up, and the heavier the potential consequences in terms of interest, fees and penalties (25% of the original amount owed). If you have not filed because you know you’ll have tax debt you can’t pay, avoiding these penalties is your top priority.
I can guess the question many want answered: “What’s my chance of staying a non-filer forever—of flying under the radar ’til the statute of limitations runs out and I’m home free?”
Here’s the reality check, some bad news followed by good news:
The Bad News About Being a Non-Filer
The bad news (it may be news to you) is that if you are owed a refund you must claim it timely (within 3 years) or lose it. Read more about this in my post about the non-filer who believes all is good as the IRS owes him.
The other bad news for non-filers is that data being collected about us in this digital age is being scrutinized by IRS like never before. At one time it was easier to ‘get lost in the crowd’ and not file federal tax returns. But the IRS now has programs to identify and collect from people who are not filing and should be. The IRS is using public and private databases such as driver license records. By cross-referencing databases they can determine who is likely to be earning money that would require them to file.
The Good News for Non-Filers
What many others want to know of course, “Is there a legal way out that won’t bankrupt me or put me in money misery for ever?”
The first piece of good news for non-filers is that regardless of how many years have passed since you filed, to ‘catch up’ you only need to file the last six years. This fact could positively influence your timing. The second piece of good news is that the IRS wants a fresh start with non-filer citizens. It wants to kiss and make up, and get paid something. The steps to get square with the IRS are not complex, but choosing the best option for your financial situation can be. You might also need help devising and carrying out a strategy to pay the least amount. That’s where I come in as your tax advisor and representative. If you’re a non-filer and have decided to explore getting square, I recommend you take me up on a free, confidential phone consult.
I’m CPA Jim Payne, your tax advisor and representative. I look after your interests. I look forward to serving you, saving you money, and releasing you from much of the stress and anxiety of dealing with the IRS or State of Florida tax authorities. Please text or call me at 352-317-5692 or email me for your free phone consult.