Fort Lauderdale Past Due Tax Returns Filed Lawyer Helping Clients Solve Their Tax Problems in Florida

The Internal Revenue Service estimates that millions of Americans have several years of unfiled tax returns. Many people fail to file their taxes one year, then end up not filing again the following year for fear of repercussions or tax debt – which only makes matters worse. If you have unfiled or past-due tax returns, it is best not to wait and speak to a Fort Lauderdale tax attorney right away before the IRS takes adverse action against you, such as filing something called an SFR (Substitute for Return). Learn how SFRs work, why they are bad news for the taxpayer, and how to remedy the situation.

What Is an IRS Substitute for Return?

The IRS reinstated its Automated Substitute for Return program in 2019 after suspending it in 2015. The program is meant to assess tax liabilities to taxpayers who have not filed their tax returns and paid their taxes. It uses information obtained from sources such as W-2 forms, 1099 forms, and information from financial institutions to file a tax return for a delinquent taxpayer who should have filed a tax return but failed to do so, even after receiving a notice from the IRS.

If an SFR is filed on your behalf, it is usually bad news, as the amount of taxes owed (in addition to penalties and interest) can be several times higher than what you would likely have paid if you had filed a tax return on time. For example, if you are an independent contractor, the IRS may use the entire amount on your 1099s as income without taking into consideration any of your expenses or potential deductions, leaving you with an inflated tax bill. If you have past due tax returns, it is best not to wait until the IRS files a Substitute for Return and take action to remedy the situation as soon as possible.

How Do I Know if a Substitute for Return Has Been Filed?

If you have not filed your tax return and do not have a valid extension, the first sign you might be dealing with an SFS soon comes as a letter from the IRS. This letter contains a notice called Proposed Individual Tax Assessment, warning you that the IRS has not received your tax return and proposes a tax assessment based on information obtained through your W-2, 1099s, financial institutions, and other third parties. The tax liability amount will also include penalties and interest.

After receiving this letter, you still have a chance to fix the situation. You may submit a completed and signed form 1040 (Individual Tax Return). Alternatively, you may simply submit a Consent to Assessment and Collection form or respond with a written statement explaining your reasons why you don’t believe you need to file a tax return. You must send in your response within 30 days of receiving the notice.

If nothing is done, the IRS will send you another letter called Notice of Deficiency. This letter lets you know how much tax the IRS will expect you to pay, plus the total balance with penalties and interest. It gives you 90 days to either agree to the proposed tax, submit a 1040 form or provide an explanation of why you believe you do not need to file a return. This notice also informs you of your rights to appeal with the U.S. Tax Courts, and that any appeal should be done within 90 days of receiving the notice.

What Can I Do to Fix a Substitute for Tax Return?

If you have one or more years of unfiled taxes, ignoring the problem and not taking any action will likely only make your situation worse. There are many ways to settle your tax debt problems with the IRS, and taxpayers can take advantage of many voluntary options to catch up on past due to returns and negotiate a way to pay off their tax bills. Even if an SFR has already been filed, you might still be able to correct the amount of taxes assessed on your account by filing tax returns for those years when you failed to do so.

In many cases, by filing your own return, you can potentially reduce the amount of tax you owe (compared to the balance you would have to pay with an SFR). Once you are caught up on your past-due tax returns, you may even be able to qualify for one of the many tax settlement programs offered by the IRS, such as making an Offer in Compromise or setting up a payment plan to take care of your tax bill. It is always recommended to seek the advice of a professional (such as a tax attorney) if you have delinquent tax returns or if you have already received a notice from the IRS.

How Can an IRS Tax Attorney Help Me?

If you have past-due tax returns, it is best to be proactive and speak to an experienced tax attorney as soon as possible. Doing nothing to remedy the situation makes matters worse, and the IRS will likely not go away and may pursue collection actions against you that become more and more aggressive, and they have up to 10 years to continue attempting to collect the money they are owed.

Ray Haselman is a past due tax returns filed lawyer in Fort Lauderdale who can help you fix your situation with the IRS and help you file your delinquent tax returns, regardless of whether they are business tax returns or personal tax returns. The Law Office of Ray Haselman has assisted countless clients with a variety of tax problems to deal with the IRS and get a fresh start. If you have tax debt, delinquent taxes, unfiled returns, or any IRS issues, contact the Law Office of Ray Haselman at 786-522-0410 as soon as possible to discuss your case and learn how we can help.