Being behind on taxes is more common than most people will admit. Maybe it was because you moved overseas, life got interrupted, you were afraid of getting a huge bill, or you just lost track of time, but unfiled tax returns can accumulate before you know it.
If you haven’t filed one or more federal tax returns, the good news is this: you can correct it. But the longer you delay, the more difficult it becomes. The IRS has programs to assist you in getting caught up — and if you’re an expat, there’s even a special option that could save you from penalties altogether.
This handbook covers all you need to know regarding filing back tax returns, both if you’re in the U.S. or overseas.
Why Filing Past Due Tax Returns Is Important
The IRS won’t forget — even if you don’t want to remember.
If you miss a tax year, it doesn’t “go away.” You continue in the system as “noncompliant,” and that can come back to haunt you later in the form of:
- Penalties and interest — particularly steep if you owe.
- Substitute for Return (SFR) filings — where the IRS does it for you, typically overestimating what you owe.
- Loss of refunds — after three years, any refund you’re owed is gone forever.
- Delinquent passport renewals — the IRS has the ability to flag seriously delinquent taxpayers.
- Loans and visa problems — unfiled returns may impact your chance of being able to get mortgages, student loans, and immigration benefits.
Even if you don’t owe much — or anything — unfiled returns bring risk. Filing overdue returns is the sole way to eliminate the black mark and the anxiety.
Common Reasons People Fall Behind
You’re not alone. Most taxpayers skip a year or two due to reasons such as:
- Moving overseas and failing to notice that they must still file
- Experiencing personal catastrophes — divorce, illness, losing a job
- Uncertainty regarding filing requirements or self-employment income
- Aversion to huge tax bills
- Expecting the IRS to call them if it’s significant
Regardless of your excuse, the IRS is more lenient to individuals who act first before being contacted.
How to File Past Due Returns (Step by Step)
Step 1: Get Your Info
Begin by getting records for every year you fell behind. That means:
- W-2s, 1099s, and income statements
- Bank interest, dividends, and investment income
- Business or freelance records
- Deductions (e.g., education, mortgage interest, medical expenses)
If you’re lacking records, you can get IRS transcripts online to access income information.
Step 2: Prepare and File One Year at a Time
Begin with the earliest year that hasn’t been filed and work forward. Some software programs accommodate prior-year filings, but if filing more than one year or have complex finances (such as foreign income), going pro is usually the best approach.
Step 3: File Returns and Track Your Status
Send your back returns to the relevant IRS address, or file electronically if eligible. After submitting, watch for IRS letters or balance notices. Reply in a timely manner.
What if You Can’t Pay?
Always file, but can’t afford to pay. The IRS penalizes failure to file more than failure to pay.
If you owe taxes, you may be able to get:
- An installment agreement to pay over time
- An Offer in Compromise to pay less (if you qualify)
- Currently Not Collectible status if you’re experiencing financial hardship
Filing puts you back into compliance and makes payment options available.
Special Relief for Expats: The Streamlined Tax Amnesty Program
If you’re a U.S. citizen or green card holder who has been living overseas and hasn’t filed your federal tax return in years, you’re not alone — and you’re not out of luck.
The Streamlined Tax Amnesty Program is the IRS’s method of saying, “Come clean, and we won’t punish you.”
Here’s what it entails:
- No late-filing or late-payment penalties if you qualify
- Only the most recent 3 years of tax returns and 6 years of FBARS required
- Created specifically for expats who had no idea they needed to file
To qualify, you’ll need to attest that your non-filing was due to non-willfulness — you didn’t want to evade taxes, you simply weren’t aware of the rules. That describes most expats.
With efficient processes, most expats file and find they owe nothing — and even receive refunds through the Foreign Earned Income Exclusion or foreign tax credits.
When to Hire a Pro
If you’re behind on several years, have foreign accounts, are self-employed, or have received an IRS letter, it’s wise to use a tax professional who is experienced in back due or expat tax cases. They can assist:
- Rebuild records
- Reduce penalties
- Seek amnesty programs
- Negotiate plans to pay
- Avoid audits and additional attention
Final Thoughts
Back taxes won’t mend themselves. But with the proper strategy, you can file delinquent returns, get back in compliance, and sidestep the worst penalties — even if it’s been years.
Whether you’re in the U.S. or living abroad, the key is to act before the IRS comes looking. Don’t wait for a letter or a fine to remind you. Take the first step now.
Need Help Catching Up on Past Due Tax Returns?
Whether you’re an expat abroad or a U.S. taxpayer playing catch-up, Expat Tax Online excels at assisting individuals in filing years of past-due returns — quickly, legally, and judgment-free. Their staff is well-versed in all the IRS guidelines, such as the Streamlined Tax Amnesty Program, and can guide you through it step by step.
Get back in compliance, breathe easy.