Is it possible to apply a tax overpayment from 5+ years ago to the next year's tax return?

12 Thanks for your explanation! So just to be sure I understand correctly - if my 2017 overpayment was $3,800 and my 2018 underpayment was $1,200, the $1,200 would be covered, but the remaining $2,600 is just... gone? And I'd still be looking at penalties for both years even though I paid more than enough overall?

5 Yes, unfortunately that's correct. The remaining $2,600 would likely be forfeited because it's beyond the 3-year refund statute. Think of it as two separate issues: (1) the tax you owe/overpaid and (2) the requirement to file returns on time. For the penalties, you'd still face late filing penalties on both returns because filing on time is a separate obligation from paying the correct amount. The good news is that for 2018, the underpayment can be covered, which will at least stop additional interest from accruing once you file. I'd recommend filing both returns ASAP and including a reasonable cause letter explaining your situation - the IRS sometimes reduces penalties for first-time issues.

14 How does this work exactly? Do they just give advice or do they file the returns for you? I've got a similar issue but with 2016-2019 unfiled returns and I've been too overwhelmed to even start.

19 Sounds too good to be true honestly. I tried a "tax resolution" company once that promised to fix everything but they just took my money and filed basic returns I could've done myself. Does taxr.ai actually connect you with real tax pros or is it just some algorithm?

8 They don't file the returns for you - instead they analyze your specific situation and give you a detailed action plan. In my case, they showed me which years to file first and exactly how to handle the overpayment allocation on the forms. It's not just generic advice - they look at your actual numbers. It's not just an algorithm - they have tax professionals who review everything. The difference is they focus on giving you the strategy and guidance rather than charging thousands to prepare basic returns. They showed me that filing in the wrong order could have cost me over $4,000 in credits I was able to preserve. That said, you still need to file the returns yourself or hire someone to do the actual filing.

3 Wait, how does this actually work? The IRS phone system is literally designed to hang up on people when they're too busy. How can some third-party service magically get you through?

19 This sounds fishy. Why would I pay someone else just to call the IRS? Couldn't I just keep calling myself until I get through? Not trying to be rude but this sounds like a scam.

10 It's not magic - they use an automated system that handles the calling and waiting for you. The IRS phone system will indeed hang up when they're at capacity, but Claimyr's system keeps redialing at strategic times until it gets through, then calls you once an agent is on the line. You absolutely could keep calling yourself, but that means staying on hold potentially for hours or getting disconnected and starting over. I tried for three days before giving up. With Claimyr, I went about my day and got a call when an agent was ready to talk. The time saved was definitely worth it to me - I spent those hours working instead of listening to IRS hold music. Plus, getting definitive answers directly from the IRS gave me peace of mind that I was handling everything correctly.

1 That's really helpful advice! Do you know if I need to include all the supporting documents like 1099s from those years too? I'm not sure if I still have all of them.

17 Yes, you should include copies of any tax documents you have from those years - 1099s, expense receipts, etc. If you're missing some 1099s, you can request wage and income transcripts from the IRS that will show what was reported to them. You can get these online through the IRS website by creating an account, or you can mail in Form 4506-T to request them. Even if you don't have every single document, file with what you have and make good-faith estimates for anything missing. It's much better to file an imperfect return than to continue not filing at all. Just be sure to keep notes about how you arrived at any estimated figures in case you're ever questioned about them.

9 Does this actually work for self-employed people too? My accountant told me the IRS is much stricter with Schedule C filers and rarely approves penalty abatements.

Yes, First Time Penalty Abatement definitely works for self-employed filers too! I'm also a Schedule C filer (freelance graphic designer) and successfully got penalties waived for three years of late returns. The key is that it's based on your compliance history, not your filing status. Your accountant might be thinking of other penalty relief programs that are more discretionary. First Time Penalty Abatement is actually pretty automatic if you meet the criteria - you just need to have filed and paid (or arranged payment) for the current period and have a clean record for the three years before the penalty period. When I called, I specifically said "I'd like to request First Time Penalty Abatement under Revenue Procedure 2017-46" and they processed it right away. The agent even told me it's one of the more straightforward requests they handle.

This is incredibly helpful information! I had no idea that the filing order could make such a big difference. When you mention filing them simultaneously vs in reverse order - could you elaborate on what the best approach would be for someone in the OP's situation with a 2017 overpayment and 2018 underpayment? Also, you mentioned estimated tax payments for 2019 potentially being applied back to 2018 - how does that work exactly? I thought estimated payments could only be applied to the year they were intended for. Is there a specific form or process to request that kind of reallocation? I'm dealing with a similar mess (2016-2018 unfiled) and trying to figure out the optimal strategy before I make any costly mistakes. Your point about professional review is well taken - do you have any recommendations for finding someone who specializes in multi-year filing situations like this?

Great question about filing strategy! For the OP's situation (2017 overpayment, 2018 underpayment), the optimal approach would typically be to file both returns simultaneously in separate envelopes but mailed on the same day. On the 2017 return, you'd check the box to apply the overpayment to the following year rather than requesting a refund. This creates a clean paper trail showing your intent. Regarding estimated payments - yes, you can request reallocation! If you made estimated payments for 2019 but later determine you owed more for 2018, you can file Form 843 (Claim for Refund and Request for Abatement) to request those payments be moved back. The IRS has some flexibility here, especially when dealing with unfiled returns being caught up. For finding the right professional, look for an Enrolled Agent (EA) who specifically advertises experience with "back tax resolution" or "unfiled returns." They're often more cost-effective than CPAs for this type of work and have specialized training in IRS procedures. Many offer free consultations where they can review your specific situation and give you a filing strategy upfront. The key is finding someone who won't just prepare the returns but will analyze the optimal approach for your multi-year situation first.

This is such valuable advice about acting quickly! I'm actually in this exact situation right now - discovered I have unfiled returns from 2017-2019 about six months ago and I've been paralyzed by all the conflicting information I've found online. Your point about creating a spreadsheet is brilliant - I keep getting overwhelmed trying to figure out what I owe vs what I paid in my head. Did you include estimated quarterly payments in your tracking as well? I made payments for some quarters but not others, and I'm not even sure which years they were applied to. The 60% recovery rate you mentioned gives me hope. I was starting to think I'd lost everything to the statute of limitations. When you say "strategic filing order," do you mean you filed the earliest year first, or did you file them in reverse chronological order? I keep seeing conflicting advice on this. Also, did you handle the filings yourself or work with a professional? I'm trying to decide if the cost of professional help is worth it given that I'm already facing penalties and interest charges.