If you have an unfiled tax return, you might think the IRS will simply forget about it. However, the reality is quite different. The IRS has a process called a Substitute for Return (SFR), which allows them to file a tax return on your behalf if you fail to do so. While this might sound convenient, it often leads to more complications and higher tax liabilities. At MyIRSteam, we specialize in helping individuals and businesses navigate these complex IRS issues. Here’s everything you need to know about SFRs and how we can assist you.
What is a Substitute for Return (SFR)?
A Substitute for Return is the IRS’s way of filing a tax return for you when you haven’t done so yourself. The IRS uses the information they have on file, such as W-2s, 1099s, and other income documents, to create this return. However, the SFR only includes your income and does not account for any deductions or credits you might be eligible for. This often results in a higher tax bill than if you had filed the return yourself.
Why You Should Avoid an SFR
Higher Tax Liability:
Since the SFR does not include deductions and credits, you could end up owing more taxes than you actually should.
Penalties and Interest:
The IRS will add penalties and interest to the amount owed, increasing your financial burden.
IRS Tax Lien:
If you don’t address the SFR, the IRS can place a tax lien on your property, affecting your credit score and ability to obtain loans.
How to Know if the IRS Filed an SFR for You
The IRS will send you several notices before filing an SFR. The first notice, CP59, informs you that the IRS has no record of your tax return. If you don’t respond, they will send a Notice of Deficiency (CP3219N), which outlines the income reported to the IRS and the amount of tax they believe you owe.
Steps to Take if You Have Unfiled Tax Returns
Gather Your Documents:
Collect all necessary documents, such as W-2s, 1099s, and any other income statements.
File Your Return:
Even if the IRS has already filed an SFR, you can still file your own return to replace it. This will allow you to claim any deductions and credits you are eligible for.
Seek Professional Help:
If you’re unsure how to proceed, consider seeking help from a tax professional. At MyIRSteam, our team of experienced tax attorneys can guide you through the process and help you minimize your tax liability.
Unfiled Taxes Help
If you have unfiled tax returns, it’s crucial to address them as soon as possible. The longer you wait, the more penalties and interest will accrue.
Here are some steps to get help with unfiled taxes:
Consult a Tax Attorney:
A tax attorney can provide legal advice and help you navigate the complexities of tax law. If you’re in Frisco, TX, you can find specialized tax attorneys at MyIRSteam who can assist you.
Use IRS Resources:
The IRS offers various resources to help you file your unfiled tax returns. You can visit their website or contact them directly for assistance.
Payment Plans:
If you owe a significant amount, the IRS offers payment plans to help you manage your debt. This can prevent further penalties and interest from accruing.
Filing Unfiled Tax Returns
Filing unfiled tax returns can be a daunting task, especially if you have multiple years of unfiled returns. Here are some tips to make the process easier:
Start with the Most Recent Year:
Begin by filing the most recent year’s return and work your way backward. This will help you get back into compliance more quickly.
Use Tax Software:
Tax software can simplify the process by guiding you through each step and ensuring you don’t miss any important details
Hire a Professional:
If you’re overwhelmed, consider hiring a tax professional to help you file your returns accurately and efficiently. MyIRSteam offers comprehensive services to help you file your unfiled tax returns and get back on track.
Unfiled Tax Returns Refund
If you’re due a refund for any of your unfiled tax returns, you must file the return within three years of the original due date to claim it. After this period, the refund will be forfeited, and the money will become the property of the U.S. Treasury.
Years of Unfiled Tax Returns
The IRS generally requires you to file the last six years of unfiled tax returns to get back into compliance. However, they can go back further if they believe you owe a significant amount. It’s essential to address all unfiled returns to avoid further complications.
Back Taxes Help
If you owe back taxes, there are several options available to help you manage your debt:
Installment Agreements:
The IRS offers installment agreements that allow you to pay your debt over time.
Offer in Compromise:
This program allows you to settle your tax debt for less than the full amount owed if you meet certain criteria.
Currently Not Collectible Status:
If you’re experiencing financial hardship, you can request that the IRS temporarily delay collection efforts.
IRS Tax Lien Help
If the IRS has placed a tax lien on your property, it’s crucial to address it immediately. A tax lien can severely impact your credit score and financial stability.
Here are some steps to get help with an IRS tax lien:
Request a Lien Withdrawal:
If you pay your tax debt in full, you can request that the IRS withdraw the lien from your record.
Subordination:
This allows other creditors to move ahead of the IRS in priority, which can make it easier to obtain a loan or mortgage.
Discharge of Property:
If you’re selling a property, you can request that the IRS discharge the lien from that specific property.
Why Choose MyIRSteam?
At MyIRSteam, we understand how overwhelming it can be to deal with the IRS. Our primary goal is to save our clients from the stress and instill the confidence that their tax issues can be resolved with the right approach. Nick Nemeth and his qualified team of tax professionals work closely with every client to understand their issue in detail and devise an effective and workable solution. We are one of the few tax resolution firms that have been helping Texans with IRS tax troubles for more than 20 years.
The Way Forward
Dealing with unfiled tax returns and the potential consequences of an IRS Substitute for Return can be overwhelming. However, by taking proactive steps and seeking professional help, you can minimize your tax liability and avoid further complications. Remember, the sooner you address your unfiled tax returns, the better your chances of resolving the issue favorably.
If you need assistance with unfiled tax returns or any related issues, reach out to MyIRSteam. Our team of experienced tax professionals and attorneys is here to provide the guidance and support you need to navigate this complex process successfully.
