The IRS allows you to file federal income taxes from previous years, regardless of whether you never filed your return or simply need to amend an error. You won't be penalized for late filing if you didn't owe the IRS money on the date your return was due.
Filing a Late Return
When you file a late tax return, you must use the tax return designed for the year in which you owe tax. For example, if you still haven't filed your 2010 tax return, you must file the 2010 version instead of the 2012 version. The IRS website offers previous years' tax returns for free download.
Filing an Amended Return
If you filed your tax return but now want to amend it due to an error, you may file an amended tax return, Form 1040X. Form 1040X is a relatively simple form that requires you to list the original entry and an amended entry for every item you wish to change. You must also include an explanation of your changes. Filing an amended tax return doesn't relieve you of liability for penalties on any amounts you underpaid because of your error.
The failure-to-file penalty is 5 percent of the past due amount per month or part of a month that you are late. If you return is at least 60 days late, the minimum penalty is $135 or 100 percent of the past due amount, whichever is less. By contrast, the failure-to-pay penalty is 0.5 percent of the past due amount for every month or part of a month that you don't pay, and no minimum is imposed. Although both penalties top out at 25 percent of the past due amount, you will save money by filing your return even if you can't pay it.
Statute of Limitations
The statute of limitations for an IRS audit is three years. Additionally, if the IRS disagrees with your assessment of the amount of tax you owe, it must issue its own assessment within three years. This three-year period begins on the day you actually file your return, however. Every day you delay filing your tax return is one more day that the IRS has to audit or assess you.
If you fail to file for a year when the IRS owes you a refund, no penalty applies. You can even claim your refund with a late tax return. However, to claim a refund you must file within three years of the due date of the tax return in which you claim the refund.
- Internal Revenue Service: Examination of Returns, Appeal Rights and Claims for Refund
- Internal Revenue Service: Failure To File/Failure To Pay Penalties
- Internal Revenue Service: Help Yourself By Filing Past-Due Returns
- nternal Revenue Service: What to Do If You Haven't Filed Your Tax Return
- Internal Revenue Service: Amended Returns
David Carnes has been a full-time writer since 1998 and has published two full-length novels. He spends much of his time in various Asian countries and is fluent in Mandarin Chinese. He earned a Juris Doctorate from the University of Kentucky College of Law.