Unfiled Tax Returns

Unfiled tax returns are a serious problem — and potentially a crime. If you have one or more years of unfiled tax returns, you need professional help from someone who understands both the tax preparation and the legal exposure involved.

As a dual-licensed CPA and Attorney, Philip Falco provides the perfect match for taxpayers with unfiled returns: attorney-client privilege protects your communications while precise CPA preparation ensures your returns are accurate and defensible.

Understanding the Risk

The greatest fear for taxpayers with unfiled returns is tax evasion prosecution. Non-filing is a misdemeanor under the Internal Revenue Code. However, the IRS's primary objective is compliance — they want you back in the system filing and paying taxes.

If you have six or more years of unfiled returns, it is critical that you contact a professional immediately. The longer you wait, the more complicated and expensive the resolution becomes.

You Can File Without Records

Many taxpayers believe they cannot file without all their original records. This is not true. There is no law preventing you from filing without W-2s, 1099s, or receipts. We can reconstruct your income and deductions using IRS transcripts, bank statements, and other available documentation.

Our Unfiled Return Services

Power of Attorney — we file IRS Form 2848 to represent you before the IRS
Obtaining lost tax documents — IRS wage and income transcripts, prior return transcripts
Determining the best filing strategy — which years to file, filing status optimization
Preparing books for businesses — reconstructing accounting records from bank statements
Preparing and filing delinquent returns — all federal and state returns

Substitute for Returns (SFR)

When you fail to file, the IRS may prepare a Substitute for Return on your behalf. These estimated assessments are rarely accurate — the IRS files you as single with no dependents and no deductions. However, SFR assessments can be corrected by filing your actual return with the proper filing status, exemptions, and deductions.

Attorney-Client Privilege

This is critically important: CPA privilege does not extend to criminal cases. If your unfiled returns lead to a criminal investigation, communications with a CPA can be compelled by the government. Only attorney-client privilege survives a criminal investigation. Philip Falco provides both the legal protection and the tax expertise you need.

Experience Counts

Preparation of prior year returns requires enormous work — reconstructing records, obtaining transcripts, calculating penalties and interest, and negotiating with the IRS. This is not a simple task, and experience matters significantly in achieving the best outcome.

IRS Letters Requiring Immediate Action

If you have received any of the following, call us right away:

IRS Letter 1058 — Final Notice of Intent to Levy
IRS Letter 729 — Notice of Deficiency
Form 12153 — Request for a Collection Due Process Hearing
CP 59 Notice — We have no record of you filing a tax return

Don't Let Fear Paralyze You

Delay becomes habitual, and fear paralyzes. Many taxpayers with unfiled returns are self-employed individuals who fell behind one year and then let the problem compound. The situation feels overwhelming, but it is fixable.

Voluntary Disclosure

Voluntary Disclosure minimizes criminal prosecution exposure. Coming forward before the IRS contacts you demonstrates good faith and dramatically reduces the risk of criminal charges. We specialize in voluntary disclosure procedures and have guided many clients through this process successfully.

Statutes of Limitations

Criminal statute: 6 years from the date the return was due
Civil statute: No statute of limitations runs on unfiled returns — the IRS can assess taxes at any time

Unfiled Payroll Tax Returns (Form 941)

The IRS considers payroll taxes the most serious tax obligation. Employers hold employee withholding in trust for the government. The Trust Fund Recovery Penalty (TFRP) is a 100% penalty that pierces the corporate veil — responsible persons are personally liable for unpaid payroll taxes.

Unfiled Form 940

Federal unemployment tax (FUTA) increases approximately 20 times if timely state unemployment payment cannot be proven. Filing Form 940 with proper documentation of state payments is essential.

Penalties for Unfiled Returns

Late Filing Penalty: 5% per month, up to a maximum of 25% of the tax due
Interest: 3-4% compounded daily on unpaid taxes and penalties

There Is Hope

The situation is not hopeless. Organize your records by year, gather whatever documentation you have, and make an appointment. We will assess your situation, develop a strategy, and get you back into compliance.