Unfiled Montana Tax Returns (2010–2024): File Now and Avoid Montana Department of Revenue Penalties

Many Montana taxpayers fall behind on their state filing obligations. It usually happens because of life events, financial struggles, or confusion about deadlines. No matter the reason, unfiled Montana tax returns do not go away alone. The Montana Department of Revenue tracks these cases carefully, and action is usually required before penalties and collection measures worsen.

When income taxes remain unfiled, the problem extends beyond just one return. Montana relies on accurate reporting of taxable income to fund schools, roads, and other essential services. The IRS also compares federal taxes and state records, which means information often overlaps. If a Montana tax return is missing, it will eventually be flagged for review.

The good news is that there are clear steps taxpayers can take to resolve unfiled Montana tax returns. By gathering records, preparing returns, and applying for payment relief where needed, it is possible to return to good standing. Acting early ensures you can respond on your own terms rather than waiting until enforcement action begins.

[Start Filing Your Montana Taxes Today]

What Are Unfiled Montana Tax Returns?

Unfiled Montana tax returns occur when a person with taxable income in the state does not submit their return by the due date. This applies to:

• Montana residents: Anyone living in the state who earns income is required to file a return each year.
  
  
• Non-residents with income: If you earned money in Montana but live elsewhere, you are still responsible for reporting and paying Montana taxes.
  
  
• Part-year residents: Individuals who moved in or out of the state must file for the portion of the year they lived or worked in Montana.
  
  
• Withholding situations: If your employer withheld Montana taxes from your paycheck, you must still complete a state return.

The Montana Department of Revenue compares employer reports, IRS filings, and other records to verify who has submitted a return. If a filing is missing, the account remains open, and penalties will start to build.

Why the Montana Department Responds to Unfiled Returns

The Montana Department of Revenue ensures all taxpayers meet their obligations. Unfiled returns are not just about missing paperwork.

• Revenue collection: Without proper returns, the state cannot collect the taxes needed to maintain public services.
  
  
• Fairness: When some taxpayers fail to file, others shoulder a heavier burden.
  
  
• Legal responsibility: State law requires that anyone meeting income thresholds file, and the department must enforce those rules.
  
  
• Record accuracy: Complete filings help determine tax rates and allow the state to set budgets responsibly.

Consequences of Unfiled Montana Tax Returns

Unfiled Montana tax returns lead to significant costs that grow over time. These measures are put in place to ensure compliance.

Penalties and Interest

• Failure-to-file penalty: The state charges 5% of the unpaid monthly tax, up to a maximum of 25%, with a minimum of $50.
  
  
• Failure-to-pay penalty: Most taxes accrue 0.5% per month, while withholding and estimated taxes can reach 1.5% per month.
  
  
• Interest charges: Montana sets annual interest rates for unpaid balances, which compound daily until paid in full.

Substitute Returns

• No deductions: A substitute return prepared by the department often excludes credits or deductions you may qualify for.
  
  
• Higher balances: These assessments use only reported income data, usually inflating the amount owed.
  
  
• Limited defense: The only way to correct a substitute return is to file an accurate one yourself.

Tax Liens

• Property impact: Liens can attach to homes, land, and vehicles.
  
  
• Credit effects: Liens show up on credit reports and damage borrowing ability.
  
  
• Stay until paid: Liens remain until the tax, penalties, and interest are satisfied.

Wage Garnishments and Bank Levies

• Employer involvement: Employers must withhold wages if the department orders a garnishment.
  
  
• Bank levies: Checking and savings accounts can be seized directly to cover unpaid taxes.
  
  
• Business assets: Companies with unfiled returns may face seizure of property or accounts.

License Suspensions

• Driver’s licenses: In some instances, the state can suspend your license until you resolve your tax debt.
  
  
• Professional licenses: Workers with state-issued credentials may lose their right to practice.
  
  
• Recreational permits: Hunting and fishing licenses may also be restricted.

Step-by-Step Relief Process

Resolving unfiled Montana tax returns requires organization and follow-through. These steps help taxpayers move forward.

Step 1: Obtain Your Tax Transcripts

• IRS transcripts: Request records of federal taxes through the IRS online system or Form 4506-T. These documents show reported income and help determine AGI for verification.
  
  
• Montana records: Submit Form RTI to the Montana Department to receive wage and withholding history.
  
  
• Keep copies: Having complete federal and state transcripts helps when preparing each return.

Step 2: Prepare Your Montana Returns

• Gather documents: Collect W-2s, 1099s, and any records of deductions or credits.
  
  
• Download forms: Prior-year tax forms are available on the Montana Department of Revenue website.
  
  
• File in order: Start with the oldest unfiled year and continue until all returns are complete.

Step 3: Apply for Payment Relief

• Voluntary Disclosure Program: Qualifying taxpayers may have penalties waived and avoid criminal charges.
  
  
• Installment plans: Monthly payment options are available if you cannot pay the full balance.
  
  
• Hardship programs: If your income does not meet the required levels, you may apply for temporary relief or an offer in compromise.

Step 4: Submit Returns and Payment

• Mailing addresses: Returns with balances due are sent to one address, while refund returns go to another.
  
  
• Include payment information: Enclose checks, electronic confirmations, or signed payment agreements.
  
  
• Track the date: Always keep proof of mailing and note when the department receives your submission.

Frequently Asked Questions

How many years back will Montana require me to file?

The state usually reviews the last five to six years of unfiled Montana tax returns, but there is technically no time limit. Through the Voluntary Disclosure Program, the lookback period may be reduced. Filing early allows taxpayers to complete obligations, limit penalties, and prevent additional interest from accumulating over time.

What if I moved out of Montana?

Moving out of state does not cancel your responsibility for the years you lived or worked in Montana. You must still file a Montana tax return if your income meets the filing threshold. The department can coordinate with the IRS to find taxpayers, so completing these returns remains essential even after relocation.

Can Montana garnish wages or seize bank accounts?

Yes, the Montana Department may order garnishments if taxes remain unpaid. Employers must respond by withholding a portion of wages until the balance is cleared. Bank levies can also occur, where funds are withdrawn directly from accounts. Filing and arranging payment plans before enforcement begins is the best way to avoid these actions.

What if I don’t have old tax documents?

You can request IRS transcripts and Montana wage records to verify income and withholding. Former employers or banks may also help you find missing forms. If some records cannot be recovered, make reasonable estimates and add comments when submitting your return. The state generally accepts good-faith efforts to complete accurate filings.