What to do if you didn't file taxes last year

Not everyone who has income is required to file a federal tax return.

Whether or not you must file a return depends upon a number of factors, including your filing status, age, and gross income.

If you didn't file a return in 2008, you may have missed out on a refund and the Economic Stimulus Payment. But what if you were required to file a federal tax return and didn't? There is no failure to file penalty if you are due a refund. If you wait too long, you risk losing your refund altogether because the deadline for claiming refunds is three years after the return due date. For example, the last day for claiming a refund for 2005 is April 15, 2009.

If you did not file a return in a prior year but should have, and were not due a refund, you will probably have to pay penalties and interest in addition to the taxes. The longer you delay, the larger these charges grow.

If you can't pay the full amount due, you may want to consider a bank loan or asking for an IRS Installment Agreement where you make monthly payments on the tax you owe. If you need help in preparing a previous year's return, the IRS can help.

For information on how to file a tax return for a prior year, to find and download previous year's tax forms and publications, visit the official IRS Web site at www.irs.gov, or call the IRS Tax Help Line for Individuals at (800) 829-1040.

Also, if your income was $40,000 or less, your local Taxpayer Assistance Center may be able to assist you in preparing your prior year return.

You can locate your nearest center on the IRS web site at http://www/irs.gov/localcontacts/index.html. Don't be confused by internet sites that end in .com, .net, .org or other designations.