IRS can file a tax return for a tax payers.
IRS will file what is called a Substitute for Return or a SFR.
IRS prepares thousands and thousands of tax returns for taxpayers that do not file.
They are called “substitute for return” or “SFR”. Since you did not prepare a return, the IRS has the right to prepare a tax return under code section 6020b of the Internal Revenue Code.
 
This IRS problem will not go away unless you take action to stop the next steps which are as follows:
 
* tax levy;
* IRS garnishment on wages;
* IRS bank levy;
* IRS federal tax lien;
 
IRS prepares these substitute for returns for taxpayers who fail to prepare there own tax returns.
IRS has probably made an attempt to contact you and those attempts have failed. Many times you may have moved and never received the mail. Whether you received a letter or not, if you fail to respond to the IRS, they will prepare your federal income tax return for you.
You will need professional tax help to resolve this tax problem.
The non-filer program within the Internal Revenue Service on these back tax issues have been stepped up in recent years. Also, beware that IRS is probably preparing other back years and the back taxes due.
If you do not reply to them, they will plan to take enforced collect action to get the takes paid.
HOW DOES IRS PREPARE YOUR TAX RETURN
IRS has a collective data base of all income you have received from all companies over the past 7 years on the IRS data base system.
Anyone who has provided income information to them from a W-2 source or a 1099 source, IRS keeps and records all this information on there master files.
Every year social security matches are made against those W-2’s and 1099, if there is no match found, IRS sends out a series of letters asking for your tax return. If a federal tax return is not filed, IRS will prepare a substitute for return, (SFR) based on the information they have in the IRS system.
They will give all taxpayers the standard deduction, regardless of your itemized deductions. Then IRS adds in all the penalties and interest. The tax bill will be overwhelming and this will cause a huge tax problem.
 
HOW TO CORRECT THIS TAX PROBLEM
First, you want to find out whether this IRS tax problem or IRS tax situation is correct. Many times the income is correct, however the IRS will only give you the standard deduction. Once you get the notice from IRS you will want to respond to them.
It is in your best interest to contact IRS before they take the next steps of tax levies, tax garnishments or bank levies.
You then want to go to a professional tax preparer and file the original return with the Internal Revenue Service.
IRS will not allow anything but the standard deductions, so dig out the receipts and records, this could significantly lower your tax bill. In some cases you may have to file an administrative claim or an offer in compromise, doubt as to liability so IRS will process your correct and original tax return.
Our staff at Fresh Start Tax has been dealing with these Internal Revenue Code Section 6020b tax problems for over 60 years. We deal in all tax problems and stop all future problems that go with this situation from happening. Call us today for a free consultation.
Email us any questions you may have today.