If you are in Denver, Colorado or live anywhere else, and have unfiled tax returns, should you work with a CPA, enrolled agent or tax accountant to help you get them filed?
The short answer is yes. Having a licensed professional help you get current with the IRS and the state can help you file more accurate tax returns, saving you money, and can also save you a lot of time while providing certainty. Continue reading if you have one or several years of unfiled tax returns.
Where to start
In general, the IRS will want the last six years of your tax returns to be filed in order for a taxpayer to be in compliance. The state will generally follow the IRS’ lead, but may have other requirements that deviate from the IRS. This means that even if, for example, you haven’t filed tax returns for 10 years, the IRS will typically still just require the last 6 years. The IRS’ modernized e-file system allows the current year and prior two years to be electronically filed, so that means any earlier years that need to be filed must be filed on paper and mailed in.
It is currently the year 2026. By way of example, if you hadn’t filed since 2019, you would be missing your 2020-2025 tax returns. You can efile 2023-2025, and then you must paper file 2020-2022, attaching all the necessary documents to the returns.
Gathering old information is the most difficult part, especially if the missing tax returns include business income. A CPA or tax accountant can help you determine which records should be obtained/created and which records are not necessary on your missing tax returns.
Pulling your IRS wage and income transcripts can be a good starting point. From these, you will see what 1099s, W-2s and other documents that have been filed under your social security number. If you are married, it is important to pull your spouse’s information as well. If you have original records, all the better, as the IRS records can sometimes be incorrect.
For business information, using records from accounting software (if applicable), bank statements, checks, receipts, calendars, mileage logs, and memory are sources of information which business records can be reconstructed from.
Next steps
If you are a Denver, Colorado or other resident and have prepared your missing tax returns and they are showing a balance due, what do you do next? At the guidance of your CPA, enrolled agent or tax accountant, they can help you weigh options, which include paying off the liabilities, setting up a payment plan, exploring penalty abatement, currently not collectible or uncollectable status or an offer in compromise.
If you are paying off the liabilities, you may be eligible for a 60 or 120 day collection hold while you make arrangements to make the payment if you need.
Depending on how much money you owe, you be able to setup a streamlined installment agreement. If you owe above that amount, the IRS may require that you submit a personal financial statement to determine what your monthly payment would be. This personal financial statement is generally also required if you want to pursue uncollectible status or an offer in compromise.
There are two types of penalty abatement – first time penalty abatement and reasonable cause. First time penalty abatement is easier to qualify but more limited. Reasonable cause is very difficult to qualify but can be a powerful tool if used in the right situations.
See this helpful IRS tool for more information on options with tax debt: Get help with tax debt | Internal Revenue Service
Navigate to the Contact page if you are a Denver, Colorado or other resident with unfiled tax returns and schedule a free 30 minute intro call with me today.
