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I haven't filed my tax return... The IRS still sent me a bill

By
Industry Observer with Redden Law 391899

I am Michael Redden and I'm a tax attorney in Minneapolis, MN.  In my practice, I represent tax payers before the IRS and tax authorities all over the country.  Tax day was yesterday.  Every year plenty of tax payers don't get their returns filed on time.  Some of them file extensions and some don't.  In fact, at least ten million Americans have at least one tax return that they never filed.  The IRS calls these folks "non-filers."

 

Potential clients are often shocked to find out that the IRS or their state Department of Revenue are still able to send them a tax bill.  Most of them think, well how does the IRS know what I owe? I never filed a return!  Well, in many cases the IRS filed a return for you.  Remember that the IRS already knows a lot about you.

 

Your employer filed a W-2.  Your customers often file a 1099.  Your bank records are easy to obtain.  It is pretty common that the IRS will feel that it has enough information about you to go ahead and assess tax. Essentially, someone at the IRS will take these documents and put them into a tax return.

 

This is called an SFR.  That means a "Substitute for Return."  Tax bills tend to be pretty huge when this happens.  In fact, I don't think I've ever seen an SFR where the taxpayer didn't owe money.  This is because the IRS doesn't know about your deductions.  They don't have your receipts right?  They just have your income and what you paid in.  (If you paid anything) 

Sold a house?  Sold some stock? Well, I bet there is a good chance your broker or the title company reported the sale.  The IRS doesn't know about your cost basis.  So, they just make the whole sale taxable. 

 

And then the penalties start....

 

This can be fixed.  If you don't think that you owe as much as the IRS claims, you can ask for audit reconsideration.  You can make an offer to compromise because there is Doubt-as-to-Liability.  You can get a chance to put your case before an appeals officer at a Collections Due Process Hearing.

 

If the IRS or Department of Revenue filed a substitute for return for you, you have options.  If you or someone you know has a tax problem, I can help.  Give me a call at 763-515-0478, schedule an appointment online, or email me at mredden@reddenlawoffice.com

 

Michael Redden

Attorney at Law

Redden Law, PLLC

12800 Whitewater Dr.

Suite 100

Minnetonka, MN 55343

Ph: 763-515-0478

Email: mredden@reddenlawoffice.com

Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful day!

May 26, 2021 06:57 AM