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Updated for Tax Year 2022 • October 18, 2022 07:20 AM OVERVIEW If you're concerned about your tax refund being held by the IRS because of unfiled returns, you have a couple of options to reduce or eliminate any extra wait for your current-year refund. IRS tax refundsThe IRS doesn’t automatically keep tax refunds simply because you didn’t file a tax return in a previous year. However, in some cases the IRS may keep your refund if you have not filed a prior-year return and it appears that you’ll owe money when you do. If you’re concerned about your refund being held because of unfiled returns, you have a couple of options to reduce or eliminate any extra wait for your current-year refund. Possible tax balances on unfiled returnsWhen you don’t file a return, the IRS uses information in its system to determine whether you’re at risk for owing tax. The information in the IRS system includes forms provided by third parties, like your W-2, 1099 and 1098 forms. When the IRS uses this information to estimate your tax, it does not consider your filing status or deductions because the IRS doesn’t know what you’re eligible to claim on an unfiled return. So, just because the IRS thinks you might owe, it doesn’t necessarily mean you will. The only way to know for sure is to prepare your unfiled return. CP88 noticeIf a refund of yours is being held because the IRS thinks you’ll owe tax on a prior-year unfiled return, you’ll receive a CP88 notice from the IRS. This notice explains why your refund is being held and lists the return years you need to file to get your refund released. Response formWhen you receive a CP88 notice, a response form will be attached. You can use this form to tell the IRS about your unfiled returns and mail it back, or call the toll free number in the upper right corner of the notice and speak with an agent directly. Examples of responses you can make:
Release of refundIf the IRS keeps your refund because of outstanding returns, the agency will release it either when the IRS receives your missing returns or after they accept your explanation that you aren’t required to file for the years listed in your notice. If you do owe tax on your unfiled returns, the IRS will use your refund toward those balances after you file. If any refund remains, you’ll receive the balance within a few weeks after the tax on your previously unfiled returns is paid. Remember, with TurboTax, we'll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation. All you need to know is yourselfAnswer simple questions about your life and TurboTax Free Edition will take care of the rest. For simple tax returns only Real tax experts on demand with TurboTax Live BasicGet unlimited advice and an expert final review. Done right, guaranteed. For simple tax returns only
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business. |