Back Tax Returns
Failing to file back tax returns on time
is the probably the easiest way to end up in trouble with the
IRS. Simply not filing a return at all is far, far more serious
of an offense than filing late. Even if you can not pay your IRS
tax debt on time, you still need to file your tax return.
The penalties the IRS charges you for filing back taxes late are
up to 9 times higher than the penalties for paying late. Keep
in mind, the IRS considers non-filing to be a "criminal offense".
The IRS uses a series of sophisticated techniques to hunt down
late filers. The most common way, is a method called computer
matching. The IRS gets a copy of every W-2, 1099, 1098, and other
tax documents that are sent to taxpayers each and every year.
Once a tax filing deadline is well past, the IRS runs the computer
program to find taxpayers who had income but didn't file a return.
When the IRS finds a taxpayer that owes money, but hasn't reported
it, they will first try and contact them at the last known address
on file. If they don't hear back, then they generally will prepare
a return for the taxpayer. This return is called an SFR (Substitute
Filed Return) and is based on the information they have on
file. Generally this information will include some or all of your
income, and little to no deductions. After the SFR has been filed,
the IRS will send the taxpayer a bill, and begin the collections
process (see IRS tax
wage garnishment, and IRS
It is definitely in the taxpayer's best interest to file their
own back tax returns. If you owe back taxes, and haven't filed
back tax returns, then two of the biggest reasons why you need
to are: it reduces the amount the IRS thinks you owe them down
to the amount you really owe them, and it allows you to set up
a payment plan with the IRS. In fact, the IRS will not enter into
any type of payment plan with you at all until all back tax returns
If you are currently faced with an IRS Audit or owe the IRS back
taxes, you should think very strongly about consulting with a
tax professional today. To speak directly with a tax advisor at
our firm, call us at (888) 918-8121. The call
is free, the consultation is free, and you are under no obligation
to hire us.