The first thing to know is that you’re not the first person to be in this situation. Next, not only are there federal taxes, there are also state tax issues and there may be several states involved.

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Here is the process.  

Federal taxes.

Call the IRS at 800.829.1040. Once they take your call, they will go through a disclosure process to insure they only give your information to you.  The agent will review your account with you and advise what year’s tax returns need to be filed.  They will communicate all the wage and income statements to you by US mail or to a dedicated facsimile number.  They will read you the “riot act” about timely filing and payment of taxes and proper withholding.  You will come to an acceptable time frame in which to prepare and file the delinquent returns.

It must be noted here that if the IRS has already levied your accounts or garnished your income, only by filing all delinquent returns will the IRS consider releasing levies and garnishments.  A point of law – in spite of all the rumors and schemes concerning the filing of taxes at all, the law states that a return must be filed for each year when filing requirements are met – usually based on amount and type of income, marital status and a few other conditions.  The law further states that no tax is due unless duly calculated taking full advantage of all legitimate and appropriate adjustments, expenses, credits, allowances and deductions and any other tax favor applicable for the appropriate year.

From this point the applicable year’s tax returns need to be prepared and filed. Once the IRS accepts them, they will process the returns and either issue a refund of over paid taxes for the last 3 years or issue account balance due notices. If you owe for a prior year and you have an overpayment in any of the immediate 3 years that overpayment will be offset to the most delinquent account.  Now, you can pay the balance or enter an installment agreement.  Other settlement options are offer in compromise or uncollected status.  If you enter an installment agreement, your payments will be applied in the following manner – tax, penalty then interest.  At some point the penalty will cap out.  The interest will continue to accrue.  The Installment Agreement monthly notices will show a breakdown of the balance due.  Do not be alarmed; what you are reading is the accumulated balance not an added balance.

State taxes.

But now you have to deal with the states.  Now you need to secure the W-2 and other documents that may indicate state withholding. The hope is you still have the original applicable documents. If not, the Wage and Income report will have names and addresses of your previous employers.  You can use that to call them and ask for a duplicate W-2 or 1099 series document.  Finally, you can contact the Social Security Administration.  For a fee, they will provide you a copy or report of the entire W-2 record for the specific year you request.

As you had the federal returns prepared now you must prepare and file the state returns.  It is HIGHLY recommended that if you owe the state you find a way to pay the account in full as soon as possible.  The states are not as forgiving as the IRS.  The will levy a lot sooner than the IRS for a lot less money.

Don’t try this at home!

Finally, I do not advise anyone do this at home.  Retain a qualified tax practitioner who will guide you through the whole process.  Mohave Tax Clinic is expert in multi-year and multi-state income tax return preparation.  We are fully automated as far back as 2000 (yes we still prepare 2000 tax year returns.)  We maintain tax preparation software with all the tax and EITC tables and the applicable adjustments, credits and so forth for each year.  We are able to seamlessly prepare returns from the oldest to the current year with little difficulty.

For more information about filing taxes or if you have not filed taxes visit