I haven't filed an out of state return in 10 years!

I didn't realize I was supposed to file an out of state return for my rental property that I've owned for the past 10 years.

Will I get audited if I file the first one this year? What kind of penalties can I expect?

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The answers to your questions depend very much on the state the property is in.

I would encourage you to contact an Enrolled Agent or CPA in the state where the property is, tell them the situation, and let them help you file these returns. It is not clear to me if you will have to file for the last three years or for all 10. I say this, because in my experience, these back returns are done because the state caught my client and ordered all back returns to be done (you yourself normally can't file a return that is more than three years old).

Also, you on your own may have trouble finding the right forms.

To find an Enrolled Agent, please see the NAEA Tax Expert Directory.

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