What Is the IRS Six-Year Rule on Unfiled Returns?

If you haven't filed taxes in years, the IRS will generally require you to file the last six years, but there are exceptions to this rule. Depending on the situation, the agency may require you to file more years or may let you get back into compliance by only filing a few years of returns. 

This post outlines how to get back into compliance after years of not filing, and it explains the benefits of filing the last six years of returns. It also looks at when you may need to file fewer or more than the last six years and outlines how to use TaxCure to find a pro to help you.

Key takeaways 

• The IRS usually requires taxpayers with unfiled returns to file the last six years.
• The six-year rule is an administrative guideline, not a law.
• You may need to file more than six years if you have significant income, didn't file due to tax fraud, or need to meet state tax obligations.
• The IRS may require fewer years in some cases - for example, from taxpayers with low income.
• You only have three years to claim a tax refund. 

What Is the 6-Year Compliance Rule?

The six-year compliance rule refers to the IRS practice of requiring taxpayers to file the last six years of returns to get back into compliance. IRS Policy Statement 5-133 states that the filing enforcement period "is not more than six years" but can be a shorter or longer period, depending on the case. 

For example, say you have not filed a tax return in 10 years. You want to get back into compliance. You owe tax for the previous two years, have a refund for three years ago, and did not have any income for the previous seven years. In this case, you may only need to file the last three years. 

Alternatively, imagine a high-income earner who has not filed in 10 years. The IRS may require them to file all 10 years of returns so that the agency can collect the unpaid taxes. With high-income earners, the IRS may have heightened reason to believe that the taxes were not filed in an attempt to evade payment. 

What is the six-year audit rule?

The IRS six-year compliance rule may also refer to situations where the IRS can assess taxes up to six years from the date the return was filed or the due date if later. Normally, once you file, the agency can only assess taxes for three years, but if the following apply, the agency can go back up to six years:

• You only reported 25% of your income or less.
• You underreported over $5000 of income from foreign financial assets. 

This deadline is called the assessment statute of limitations. 

When is the assessment deadline on unfiled returns?

The IRS has unlimited time to assess tax against you if you file a fraudulent return or if you didn't file a return at all. The time clock on tax assessments does not start until you file a return.

What does the IRS consider when deciding how many years you need to file?

IRS Internal Revenue Manual (IRM) § 4.12.1.3 outlines the guidelines for delinquent returns and filing enforcement. It states that Revenue Officers should consider the following when determining how many years of returns should be filed:

• Taxpayer's history of compliance. 
• Income from illegal sources.
• The effect on voluntary compliance.
• The amount of tax that could be collected in relation to the time and effort required.
• Any special considerations related to the taxpayer, their industry, or the type of tax involved.

The consequences of unfiled returns vary based on how many years it's been since you last filed.

Reasons to File the Last Six Years of Returns

Filing the last six years of returns allows the following to happen:

• Establish a correct tax assessment - Catching up on unfiled returns shows you exactly how much you owe the IRS. If you don't file, you risk the agency issuing a substitute for return on your behalf, which generally shows a higher tax liability than you really owe.
• Claim refunds on unfiled returns - You can only claim refunds for up to three years after the original filing deadline. The refunds you earn can help to offset the bills from years that you owe taxes. Not that if you file a return that shows a refund and you have unfiled returns from previous years, the IRS generally will not release the refund until you have filed the previous years' returns.
• Qualify for payments or settlements on tax debts - The IRS generally will not allow you to set up payments on back taxes until you are compliant with the filing requirements. In other words, you typically have to file the last six years (or prove that you didn't need to file) so that you can set up payment plans or offers in compromises on any taxes that you owe. 
• Get credit for Social Security or Medicare contributions - If you are self-employed, the only way to get credit for making Social Security and Medicare contributions is by filing a tax return that shows you paid these taxes. If you have an employer, you will get credit for the SS and Medicare payments they withheld from your check whether you file a return or not.
• Prove your income - Lenders often use your tax return to verify your income. Typically, they don't go back six years, but if you're self-employed, you may need to show the last two years of returns to get a mortgage or another significant loan.
• Start the clock for the assessment statute of limitations - Again, if you don't file, the IRS has unlimited time to assess tax against you. Once you file, you start the timeclock for the assessment statute of limitations, and now, the agency only has three years (six in limited cases) to assess taxes against you. Note that there is no time limit if the return is fraudulent.
• Avoid criminal prosecution for failure to file - Failure to file can be a criminal offense if you didn't file in a willful attempt to evade taxes. Filing your returns can help you avoid these types of accusations or charges.

Keep in mind, however, that filing the last six years of returns is merely a rule of thumb. You may not need to file all six years in some situations. 

Why Filing Older Returns May Not Be Necessary

If any of the following apply, you may not need to file the last six years:

• You were not required to file - There is no reason to file tax returns if you were not required to file and you will not be able to claim a refund. 
• You're applying for a settlement on an SFR assessment - Normally, if the IRS assesses taxes against you with an SFR, you should file a return that shows the correct assessment. However, if you're applying for (and likely to get approved) an offer in compromise, you may not need to waste time filing. 
• You qualify for currently not collectible status - The IRS may not require you to file if you qualify for currently not collectible status. Remember, the IRS isn't going to waste a lot of time or effort forcing people who cannot afford to pay into compliance.

Talk with a tax professional for guidance on your unique situation. They will be able to tell you if you should file all six years or just some of them. 

When You May Need to File More Than Six Years of Returns

The IRS will alert you if you need to file more than six years of returns. If you're working with a tax pro, they can also let you know if extra years are going to be required. You may be required to file more than six years if fraud is suspected or if you are a high-income earner. 

Additionally, some states may require you to file more than the last six years - state tax codes vary drastically, which is why it's important to hire a tax pro who has experience with the tax agency in your state.

FAQs

What is the statute of limitations on unfiled returns?

There is no statute of limitations on unfiled returns. The IRS can go back an unlimited amount of time to assess tax on unfiled returns. Once you file, the agency only has three years (six in some cases) to assess additional taxes against you.

What if I don't file my back taxes?

The consequences of unfiled returns vary. You may forfeit refunds. You also risk the IRS assessing tax against you and involuntarily collecting it from you. 

How do I find out how many years I need to file? 

Consult with a tax professional. Or contact the IRS directly for guidance. If you have not been contacted by the IRS yet, you may want to reach out to a tax pro first. They can help you get back into compliance while also reducing the risk of unwanted tax assessments or collections. 

When will the IRS come after me for unfiled returns?

The agency may take several years to come after you for unfiled returns, or the agency may start sending notices a couple of months after the extended tax return deadline. 

For example, in 2024, the IRS went after high-income earners who had not filed between 2017 and 2021. As you can see, that is several years after the deadline. However, many people who didn't file their 2023 tax returns received notices as early as November 2024.

How do I file unfiled returns?

To file back taxes, you must gather income documents from the unfiled years and find info related to expenses, credits, and deductions. Check out this guide on how to file unfiled returns for tips.

Where do I get the documents to file back taxes?

You can get wage and income transcripts for the last 10 years from your IRS online account. This includes any W2s, 1099s, or other income documents that were created by payers (employers, banks, investment houses, etc) for you. 

If you are self-employed, you can reconstruct your income and expenses by going through bank accounts, point-of-sale records, invoices, and receipts. An accountant can help you go through old records and generate profit-and-loss reports. You may also have to go through your old bank or credit card statements if you want to itemize your deductions.

Can the IRS collect taxes for more than 10 years?

Once the taxes are assessed, the IRS only has 10 years to collect them, but the taxes cannot be assessed until you file the returns. In other words, the 10-year timer doesn't start until you file.

Can I get a refund for filing old returns?

You can get a refund for returns due in the last three years. For older years, you cannot get a refund, but you can claim credits that help to reduce the tax due. You may also be able to generate losses that you can carry forward to offset the tax liability for future tax years.

Find Help on TaxCure Today

If you're behind on filing tax returns, the IRS typically expects you to file the last six years of returns. However, in some cases, you may be able to get back into compliance by filing fewer years, and in other cases, the IRS may require you to file more than six years of back taxes. 

Getting behind on filing tax returns can be very stressful, but you don't need to live in limbo any longer. Use TaxCure to find a tax pro who can answer your questions, help you determine how many years you need to file, and get you back on track. The right tax pro can also help you get back into compliance with your state and help you identify payment options for your years of unfiled returns. 

Don't wait. Start the search on TaxCure today. You can use the filters to narrow down the results to find pros who have experience with unfiled returns, and you can further narrow down the results based on even more specific concerns such as unreported crypto, business taxes, foreign assets, or other concerns.