Blog Post

iStock_000019207639Small_0_0Substitute for Return

In case you haven’t heard, here’s the news: you have a legal obligation to file a tax return – it’s inescapable. Here’s the bad news: If you don’t file a tax return (even after receiving several letters from the IRS reminding you that you must file) the IRS will go ahead and prepare a return for you. Here’s the really bad news: the IRS only knows about your reported income, nothing about any deductions, losses, or credits you may have, so the amount they want you to pay in taxes could be HUGE. This mechanism is called a Substitute for Return (or SFR), and it’s the way the IRS finally gets you to pay attention and take some action.

Helpful Hint: File your returns (especially if they’re late) before the IRS sends you an SFR. Once you’ve been sent a Substitute for Return, they will look very, very carefully at all your subsequent returns.

It can be alarming to receive documents in the mail from the IRS.  Be sure that you are taking the right actions at the right times.

For help with these and other tax issues, contact Martha Miller, a Litchfield County, Connecticut tax attorney, admitted to practice in CT, NY, and before the US Tax Court. We accept state tax problems for CT, MA and NY, and we accept U.S. federal tax problems from any location in the world.