If you fail to file your returns, you could be subject to IRS Substitutes for Return, or you could be criminally prosecuted for federal tax evasion. You should know however that the IRS would greatly prefer that you file your returns, and that you get back into the system.
If you cannot locate your income and expense information from those years, then we can obtain from the IRS all of your W-2 and 1099 tax information as well as your interest and dividend records as well. This information will be used to to prepare your returns.
As a general rule, when a taxpayer is struggling financially to pay their household bills, and they have little equity in real estate and household property, then they may be good candidates for the Offer in Compromise Program. If you have limited income and have otherwise depleted your assets, then you may be a good candidate. However, you must be advised that
Yes, under specific circumstances, a bankruptcy filing can be the quickest and most efficient way to eliminate income tax debt. Bankruptcy will not eliminate payroll tax or State sales tax obligations. Moreover, with income tax debts, there are strict rules to follow: (1) the tax debts must be more than 3 years old; (2) the actual tax returns must have been filed at least 2 full years prior to the bankruptcy filing, and (3) the income tax debt must have been "assessed" by the IRS at least 240 days prior to the bankruptcy filing. There are other events which could "toll" the 3 year tax debt time period, and as a result, you should only seek to discharge (wipe out) IRS tax debts by hiring an experienced bankruptcy attorney who is knowledgeable about these rules.
But if these rules apply to your IRS income tax debts, then a bankruptcy filing can be completed within 4 to 5 months (Chapter 7 filing) and you may be able to protect ("exempt") all of your property without repaying anything to the IRS on those tax debt obligations.