I haven't filed taxes in quite a few years. I haven't owed anything. How far back should I file?

I've been meaning to file for years, but for one reason or another, I never have. (I KNOW I'M SUPPOSED TO FILE EVEN THOUGH I DON'T OWE, BUT I'VE ALREADY ADMITTED THAT I HAVEN'T SO WE DON'T NEED TO ADDRESS THAT ISSUE. THANK YOU FOR FOCUSING ON THE QUESTION I'M ASKING RATHER THAN TELLING ME SOMETHING I CAN NO LONGER DO ANYTHING ABOUT.) Anyway, I want to file, but I want to know how far back should I file? I've been told I don't need to file for more than three years. Is this good advice, or should I file for every year since I stopped filing?
Additional Details
I haven't filed and I haven't payed. I've been working abroad for 12 years and my tax base has been overseas.

This is definitely something that you'll want to go speak with a tax adviser on. They are going to be able to go over very complicated tax law with you and help prevent you from getting crapped on by the IRS. They will be able to help you get your things in order and can expedite the process.

If you're absolutely sure that you don't owe anything then it would not make any sense to file returns for any years prior to tax year 2004. You only have 3 years from the filing deadline to collect any refund due, so get that 2004 return in by April 15th or you'll lose out on that one as well.

You've already lost out on any refunds for 2003 and before so filing those is a moot point, HOWEVER you may wish to prepare the returns anyway to be SURE that you don't owe anything. It's not likely that you owe anything though; the IRS would have been in touch with you already if they though that you did.

While a 20 year old open tax year is still technically within the SOL until a return is filed to start the SOL clock, the IRS does not pursue tax debts older than 6 years as a matter of standard policy where a return was not filed. To go back more than 6 years the IRS has to prove fraud and the courts have held that failure to file is negligence, NOT fraud. If you safely make it past the 6 year point (from the filing deadline, so 2001 in your case) without hearing from the IRS you can safely skip filing.

Edit: Well, your additional details muddies things significantly now! How do you know that you don't owe for those years? Was your income below the filing requirement amount for all of them? If not, you very well may owe -- and quite a bit at that!

US citizens and residents are subject to US tax on their world-wide income regardless of where they live or work. While there is a Foreign Earned Income Exclusion that might have helped you, you MUST file a timely return to claim that. That generally means by the filing deadline or you LOSE it. The IRS will give you a 1 year sprout so you can still claim it for tax year 2006 if you're eligible AND you file that return by April 15th! Unfortunately it's lost now for 2005 and all earlier years.

The only benefit you can claim now is the credit for foreign income taxes paid on Form 1116. If you lived in a high tax country you may be OK if you paid more in tax there than you would have paid in the US. But if you lived in a low tax country you may be facing a breathtaking tax bill. And there will be penalties for late filing on top of the penalties and interest for late payment of the tax.

Your situation demands professional assistance from a CPA or EA who specializes in expat tax issues. Don't take this to a storefront tax prep mill; this is far to messy a situation for them to handle competently. Gather up all your records from 2001 going forward and be prepared for the worst.

Edit 2: It doesn't matter that your income wasn't reported to the IRS or that you work for a foreign company. You are REQUIRED BY LAW to file a US income tax return in ANY tax year that your income exceeds the filing requirement amount. Where you live has NO affect on the requirement to file.

You've already screwed yourself out of some very generous tax benefits of working overseas by not filing. You can't unring the bell now. Sorry.

one thing to think about: did you even HAVE to file for any specific year. if you did not meet the minimum requirements to file for that year, then you do have to worry about those years. go to IRS.gov and type "who must file" in the search box.

Well, let's take this one step at a time. If you are 100% sure that you don't owe any back taxes then there is no harm and no foul.

The are set guidelines of when you have to file and when you don't have to file. I don't know if you exceeded them or not.

The easiest way to solve this is by contacting the IRS. It is very possible that they have filed a return for you in some of these years...through information provide to them.

The three year limit is for a refund...after that even if they owe you money you will not receive it.

The IRS now has 10 years to collect a tax due once a return is filed. This doesn't start until at the deadline for that year it starts when you actually file the return. Meaning that if you didn't file a tax return in 1960 and you should have they can still get you for that. Unless, they filed one for you.

EDIT: Yes your edit changes the entire situation. Without more information I am not even going to try and answer it. I do know most of the answers...but it gets very complex...and this is a free forum. But, I will advise you to file a return for every year that you haven't filed. There is no way that you know that you don't owe any tax for prior years short of running the numbers. Some of it depends of how many days you spent where.

Hope this helps

2ND EDIT: You aren't listening,,,if you are still a US citizen then your income is taxable no matter where you earned it!!!

Unless, it is covered in a tax treaty. Or your working abroad for a US company. The only way to avoid this is to give up your citizenship or have a dual citizenship.

You might or might not owe US taxes...if I had to guess it is going to be a rather large amont.

Hope this help too

Edit 3: There is no exculsion for going overseas and working for a forgein company. It has to be for a US based company! Now, the US company can be a contractor for a forgein company. You said it wasn't. I don't understand were your getting this exculsion. And, as far as the 2555 you haven't filed a timely return so that is null and void also.

Footnote to Bostonia: Well we tried...what else can you do.

You are assuming that you don't owe. File pronto.

When a US citizen lives and works overseas he/she can't exclude his/her income until they have filed and have elected to exclude the foreign earned income. Without the exclusion, if you made more than the filing requirement you could in fact owe taxes.

With edits.
Fortunately for you, if you manage to file and owe zip, the IRS will accept the 2555 practically forever. Since the one year you were in the US you didn't work, you slipped through on the cracks on that one. Usually people hustle once they get married and start having kids as they want to be able to get return some day to the US and have their loved ones qualify for green cards....

You file one return for each year that you missed. You got bad advice on the three year advice. What the person meant is that you must file each return within three years. I'm not sure how the three years is counted, but I think you are within your rights to still file 2005, 2006, 2007. 2005 must be filed by April 15th, 2008. Anything before 2005 is very late and may face penalties due to late filing even though you didn't owe anything. I really don't know for sure, but that is my understanding.

I'm in the same boat as you. When I moved to a new county, I got sued by my son's deadbeat dad. I soon found out that he was taking me to court because the old county didn't award much in the way of back child support and the new county awarded total back child support, so he wanted to clear away his past liability. The case was transfered to the new county and he had to pay $36,000. It cost me $80,000 in legal fees and lost business that had to be set aside to handle the legal case. I had no choice but to set aside all my paperwork not related to the case. Because I was moving both my business and my family and got sued at the same time, I couldn't handle everything. It has taken five years to get to the point where I could begin to address paperwork.

Anyway, I'm not in a position to attack you as I have no idea if I owe money along with my late filing.

The statute of limitations never tolls on late returns. If you haven't filed for 20 years, then you need to file 20 returns, one for each year.

There is no provision that excuses filing after a given length of time.

You really really need to get the help of a PRO who has been in the businees for many years. I'm sure of it.

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