Colorado Springs: What if the IRS Filed a Tax Return for Me?

 

Failed to file your tax return for a few years? Are you aware that IRS Code Section 6020 allows the IRS to file a tax return for you?  

What is IRS Code Section 6020?

IRS Code Section 6020 grants the IRS the authority to create a substitute tax return (SFR) for individuals or businesses that neglect to file their tax returns. This provision ensures that the IRS can assess and collect taxes even when the taxpayer does not comply with filing requirements. The most common SFR under this section is 6020(b).

6020(b) Substitute Returns

Under 6020(b), the IRS prepares a return based on available information, such as W-2s, 1099s, and other third-party data. This return is often less favorable to the taxpayer, as it does not include deductions or credits the taxpayer might be eligible for. The IRS will then send a notice of deficiency, giving the taxpayer an opportunity to contest the return or provide additional information.

Implications for Taxpayers

Failing to file a tax return can lead to significant consequences, including penalties, interest, and potential legal action. An SFR under 6020(b) can result in a higher tax bill due to the lack of deductions and credits. 

What can the Taxpayer do?

The taxpayer should consult a tax professional for best information on how to proceed forward.  Marcelino Dodge, EA, CTRC will review your circumstances and make a recommendation to either get the correct tax return filed or to let the SFR stay in place.  

Cash Tracks Financial of Colorado Springs
Marcelino Dodge, EA, CTRC
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
www.cashtracksfinancial.com
success@cashtracksfinancial.com

Colorado Springs: Am I Responsible for My Former Spouse's Tax Debts?

 

Did your former spouse prepare joint tax returns, have you sign the returns, and then file the returns? Then months or years later you come to learn that your spouse failed to report all his income.  You learn that when an IRS letter arrives notifying you that the tax return has been adjusted.  The adjustment shows an increase in taxable income from the 1099's your spouse failed to included as income on the original return.  But, that is just the beginning.  In addition to the increased income, there is an increase in not only income tax, but also there is now a large amount of self-employment tax due.  To top it off, you are required to repay some refundable tax credits that were refunded to you on the return.

The amount due can be tens of thousands of dollars of tax.

Are you responsible for these taxes?  Can the IRS require you to pay the amounts due because of the jointly filed tax returns?  Technically, the answer is yes to both questions.

But, with consideration of the the facts and circumstances, you may qualify for relief under Internal Revenue Code Section 6015(b).  This code section has requirements that must be met for you to qualify for Innocent Spouse Relief.

Marcelino Dodge, CTRC, EA of Cash Tracks Financial has helped taxpayers obtain this type of relief.  He can analyze you circumstances and suggest the best course of action to solve your tax problem.

Cash Tracks Financial of Colorado Springs
Marcelino Dodge, EA
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
www.cashtracksfinancial.com
success@cashtracksfinancial.com