How to File Taxes While Incarcerated

Tax payments are suspended while incarcerated, but they don't disappear.

Taxpayers who are incarcerated, but earned a substantial income, are still required by the IRS to file a return, although the payment of those taxes is suspended. To avoid penalties and interest, however, it is important to know who is required to file a return, and how to file a return if you or your spouse is incarcerated.

Things You'll Need

• IRS Form 2848
• Computer
• Phone

Instructions

1. Appoint someone you trust as your power of attorney for the length of time in which you are sentenced to prison. A power of attorney letter (Form 2848) grants a third party the power to represent you and handle tax matters on your behalf. Complete IRS Form 2848, and mail it or fax it to your local IRS office. You can download a copy of the form by going to http://www.irs.gov/pub/irs-pdf/i2848.pdf. Included in the powers granted to POAs is the right to sign tax returns on behalf of the taxpayer under certain circumstances. Include a statement on Line 5 of Form 2848 authorizing your representative to sign the return on your behalf.

2. Complete IRS Form 56 to add a person on to your account as trustee, guardian or administrator of your tax account.

3. Instruct your power of attorney to call the IRS at 1-800-826-1040 to request a copy of your income information. The income information will be used to complete the tax return. Before making the call, your power of attorney will need to have either a copy of Form 2848 or the CAF number assigned by the IRS on hand to verify with IRS his right to speak on your behalf. Remember, if you had no income or very little income, you are not required to file a tax return, and your requirement to file taxes while in prison are waived. To determine if you are required to file a return due to income earned, go to http://www.irs.gov/individuals/article/0,,id=96623,00.html.

4. If, at a later date, you decide to terminate Form 2848, just mail in a copy of the original form with the word "revoke" written across the top of the page.

5. To complete an online return, the process is much easier. Your POA, friend or trustee only needs the amount of your previous year's adjusted gross income to file the return online. This can be obtained by mailing a copy of Form 4506 (Request for Copy of Tax Return) to the IRS. Be advised that if you are due a refund, the deposit must be made to a bank account that is in your name. If not, the refund will be returned to the IRS, and if you owe back taxes, will also be taken by IRS to satisfy the tax debt.

References

• IRS: Tax Guide 2010

Resources

• IRS: Form 2848