Colorado Springs: What If the IRS Files a Substitute Return For Me?

Forget to file your tax return?  Did you think that if you did not file your tax return the IRS would not notice?  Whatever you are thinking, note that the IRS has more information than you realize.  IRS code section 6020 allows the IRS to file a tax return for you with the information they have that includes 1099's, W-2's, and other tax reporting forms.

The question is what can you do if the IRS has filed a Substitute for Return (SFR) on your behalf?

1. Hire a Tax Professional: An Enrolled Agent (EA) that specializes in tax resolution matters can review your circumstances and assist you in taking the proper steps to resolve this tax matter.

2. Gather Your Documents: Collect all tax returns and relevant financial documents, including W-2s, 1099s, receipts, and any other records that support your income, deductions, and credits for the tax year in question.

3. File Your Original Return or Accept the IRS Prepared Return: Depending on your circumstances, you may not even need to file the original return.  Each case is different, especially if you have several years of unfiled tax returns.

4. Respond to the IRS: Work with your tax professional to timely respond to IRS notices.  I recommend sending any mailings certified with with a return receipt. 

Taking these steps can help fix the situation and potentially reduce your tax liability. Always aim to file your returns on time to avoid the complications of an SFR.

 

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: 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