It’s common for individuals and small business owners to fall behind on filing, sometimes by many years. Yarborough & Potter helps you get caught up. We prepare and file overdue tax returns, deal with the IRS on your behalf, and build a clear path back to compliance.
Missing a tax filing deadline is more common than most people think. It usually starts with one year. Maybe it was a difficult time financially, or the records were a mess, or life just got in the way. One missed year turns into two. Two turns into five. Before long, the thought of catching up feels overwhelming, so it keeps getting pushed off.
If that sounds familiar, you’re not the first person to sit across from us with that story. We’ve worked with individuals who haven’t filed in over a decade and business owners who fell behind on both personal and business returns for multiple years. In almost every case, the situation is more manageable than they expected once there’s a plan in place.
The most important thing to understand is that the IRS doesn’t ignore unfiled returns. Eventually, they act on them. That might mean filing a substitute return on your behalf (which almost always results in a higher tax bill than you’d owe on your own), assessing penalties and interest that compound over time, or escalating into collection activity like liens and levies. The sooner you take control of the process, the more options you have and the less it costs.
Yarborough & Potter’s team includes Enrolled Agents with former IRS experience, which means we understand how the agency handles delinquent filers from the inside. We know what triggers escalation, what buys you time, and how to get things resolved efficiently.
Putting off your tax filings doesn’t make the problem smaller. It makes it bigger. Here’s what’s happening behind the scenes when returns go unfiled.
When you don’t file, the IRS can create a substitute for return (SFR) based on the income information they already have from employers, banks, and other third parties. These substitute returns don’t include any deductions, credits, or expenses you would have claimed. The result is almost always a tax bill that’s higher than what you would actually owe if you filed on your own.
The failure-to-file penalty is 5% of the unpaid tax for each month the return is late, up to a maximum of 25% of the tax owed. The failure-to-pay penalty adds another 0.5% per month. Interest compounds on top of both. After a few years, the penalties and interest alone can rival the original tax balance.
If you were owed a refund for a given year, you only have three years from the original filing deadline to claim it. After that, the money is gone. We’ve seen clients who were owed substantial refunds but waited too long to file and lost them permanently.
Unfiled returns can eventually lead to liens on your property, wage garnishments, and bank levies. Once the IRS moves into active collection, your options narrow and the process becomes more stressful.
If you owe a seriously delinquent tax debt (currently over $62,000), the IRS can certify that debt to the State Department, which can deny, revoke, or limit your passport.
If you owe back taxes and want to negotiate a payment plan, an offer in compromise, or another resolution with the IRS, the agency requires that all returns be filed first. You can’t resolve a tax debt until your filing history is current.
Whether you missed one year or ten, we prepare the delinquent 1040 returns needed to bring your personal filing history current. We pull your IRS transcripts to identify what the agency already has on file, gather your income records, and prepare each return to make sure you’re claiming every deduction and credit you’re entitled to.
Business returns carry their own deadlines and their own penalties, which are often steeper than individual penalties. If your sole proprietorship, LLC, S-corp, or C-corp has unfiled returns, we prepare and file those alongside your personal returns to get everything back on track at once.
Many of our delinquent return clients also have a tax debt that needs to be addressed. The IRS requires all returns to be filed before they’ll consider most resolution options. We coordinate the catch-up filing with the tax debt resolution process so both move forward together.
If you’ve already received notices or a substitute for return assessment, the clock is ticking. We review what the IRS has done, determine whether their assessment is accurate, and file your actual return to replace it when filing your own return results in a lower tax liability.
We start with a conversation about how many years are outstanding and what’s happened so far. Have you received notices? Has the IRS filed substitute returns? Is there active collection? This gives us a clear starting point.
We request your account transcripts from the IRS and, when applicable, state agencies. These show us exactly what the IRS has on file for each year: reported income, substitute return assessments, penalties, interest, and any payments or credits applied. This is the foundation for everything that follows.
We work with you to collect the income records, expense documentation, and other information needed to prepare each return. If your records are incomplete, we use the IRS transcript data, bank statements, and other available sources to reconstruct what we need. Missing records are not a reason to keep putting this off.
We prepare each outstanding return, making sure every deduction and credit you’re entitled to is claimed. If the IRS has filed substitute returns that overstated your liability, filing your own return replaces theirs. We file strategically, prioritizing the years that have the most impact on your overall situation.
Once the returns are filed, we review the penalties that have been assessed and identify where penalty abatement may be available. If there’s a balance due, we help you understand your options for resolving it, whether that’s paying in full, setting up a payment plan, or pursuing another resolution path.
Getting caught up only matters if you stay current afterward. We help you set up a system so your future filings happen on time, and we’re available for ongoing tax preparation so you don’t end up back in the same situation.
We understand that people don’t fall behind on their taxes because they don’t care. Life happens. Businesses get overwhelming. Records pile up. The longer it goes, the harder it feels to start. We’ve heard it all, and we’re here to help, not to judge.
Willful failure to file is technically a misdemeanor, but criminal prosecution for non-filing is extremely rare and is generally reserved for cases involving fraud, evasion, or very large amounts of money. For the vast majority of people, the consequences are financial: penalties, interest, and potential collection actions. Getting into compliance voluntarily is one of the best things you can do to reduce your risk.
The IRS typically requires the last six years of returns to be filed before they consider you compliant. In some cases, they may ask for more. We’ll pull your transcripts to determine exactly which years are outstanding and which ones the IRS is prioritizing.
We can obtain that information from the IRS. Your wage and income transcripts show what was reported to the IRS by employers, banks, and other payers for each year. We use that data, along with any records you do have, to prepare accurate returns.
You can still claim a refund if the return is filed within three years of the original due date. After that window closes, the refund is forfeited. If you suspect you may be owed refunds for recent years, that’s a good reason to act quickly.
That’s a substitute for return (SFR). The IRS used the income data they have on file to calculate your tax without any of the deductions, credits, or expenses you would have claimed. The result is almost always a larger tax bill than you’d actually owe. Filing your own return replaces the SFR and, in many cases, reduces the balance significantly.
They go hand in hand. The IRS won’t negotiate most resolution options (installment agreements, offers in compromise) until all required returns are filed. We handle both sides of the process, preparing the delinquent returns and pursuing resolution simultaneously so you make progress on the full picture.
Filing a delinquent return does not automatically trigger an audit. In fact, not filing creates more risk than filing does. That said, we prepare every return with the same level of accuracy and documentation we’d use if it were being filed on time, which is the best protection against audit issues.
It depends on how many years are outstanding and how accessible your records are. Simple returns can be turned around quickly. More complex situations with business returns, missing records, or multiple entities take longer. We’ll give you a realistic timeline after our initial review so you know what to expect.
If you’ve been putting off unfiled returns, you already know the weight that carries. One conversation with our team is all it takes to start lifting it. We’ll look at where things stand, tell you exactly what needs to happen, and handle the work from there.
Free consultation. No judgment. No lectures. Just a clear plan to get you caught up and keep you there.
Yarborough & Potter Inc. is eager to answer your queries about our tax services. You can begin your relationship with us today by contacting us using the form below.
© Yarborough & Potter Inc. – Privacy Policy
License Numbers: 00076873-EA, 00091003-EA
