You’ve received mail from the IRS, and it’s a CP59, CP516, or another related non-filer notice along with Form 15103. At this point, you still have time to act, but if you don’t respond, the IRS may file a return on your behalf and start the involuntary collections process.
The IRS typically sends Form 15103 to taxpayers who should have filed a tax return, based on income information the IRS received from third parties. However, before creating a Substitute for Return based on the information they’ve received, the IRS sends this form to provide taxpayers with an opportunity to address the situation.
Find out more about why and when the IRS sends Form 15103, where it fits into the tax collection process, and how to fill it out.
Key Takeaways
- The IRS uses income forms (W-2s, 1099s, etc.) to identify taxpayers who did not file tax returns but may have been required to do so.
- If the IRS thinks you should have filed, they’ll send a non-filer notice and Form 15103.
- You can use Form 15103 to indicate why you have not filed or that you have already filed.
- Responding promptly is crucial to avoid a Substitute for Return.
- A Substitute for Return may result in a higher tax bill because it does not account for deductions and credits.
Why You Received Form 15103
Form 15103, Form 1040 Return Delinquency, is a notice the IRS sends out when it believes a taxpayer has failed to file a tax return in a year that they were required to file. This typically happens when the IRS receives W-2s, 1099s, or other income reporting documents from third parties, but then cannot match those documents to a tax return.
You may have received this form because:
- The IRS hasn’t received your tax return yet – typically happens if you filed in the last 8 weeks.
- The IRS sent it in error – for example, you already filed, but they lost the return.
- The IRS believes you need to file, but you don’t – may happen if the IRS has received documents indicating you need to file, but other factors negate the filing requirement.
- The IRS has sent the form to a deceased person – next steps vary based on your role in the estate and the details of the situation.
- You need to file, but haven’t – in this case, filing will help you avoid other unwanted consequences.
The IRS generally sends this form along with an automated notice regarding your unfiled return. Notices that may accompany this form include CP59, CP516, and CP518.
Where This Form Fits Into the Collection Process
If you don’t file a tax return, the IRS doesn’t know how much you owe, and the agency can’t start the collection process. To get around this, the IRS may assess the tax by filing a Substitute for Return.
The 15103 form, along with the accompanying notice, is essentially your chance to avoid a Substitute for Return (SFR). Why do you want to prevent an SFR? Because when the IRS creates a Substitute for Return, it includes only the income information they have received from third parties. It does not include any deductions or credits, and as a result, typically results in a much larger bill than you’d receive if you filed a tax return. Once the IRS files a Substitute for Return, the agency can begin collection efforts. If you don’t pay voluntarily, they may use tax liens, wage garnishments, or asset levies to collect the tax.
When you respond promptly after receiving Form 15103, you can stay in control of the filing process and avoid owing more in tax than you should.
Step-by-Step Guide on Filling Out Form 15103
Form 15103 is fairly straightforward. Follow these steps to respond promptly and avoid further escalation from the IRS:
- Fill out your contact details: The top section includes your name, taxpayer ID, address, phone number, and the best time to call you.
- Fill out the explanation in the appropriate area. Depending on the situation, you need to note one of the following:
- The person named in the notice is deceased.
- You were not required to file for the year in question.
- You already filed.
- Attach documentation. Depending on your reason for the IRS not having a return on file, you may need to provide additional documentation. If you filed your tax return already, enclose a signed and dated copy of the return. If you have other evidence supporting your choice not to file, you may want to include that as well.
- Sign, date, and return. Sign, date, and return the form. The IRS includes an envelope to return the form to them, so all you need to do is ensure that their address is visible through the envelope.
- Follow-up. Consider setting up an online account so you can track if the IRS processed your return, received this form, or made any other changes to your account. Alternatively, consider calling the agency within eight weeks of filing this form to ensure they have received it.
Want help responding to Form 15103? Then, contact a licensed tax professional for guidance. They can help you respond and deal with unfiled returns if necessary.
What to Do Based on Your Situation
How you handle Form 15103 depends on your situation. Here are some additional tips for various scenarios:
- You already filed: Include a signed, dated copy of the tax return with your Form 15103.
- You weren’t required to file: State the reason that you weren’t required to file. Maintain any records supporting this claim in case the IRS needs to see them.
- You still need to file: File as soon as possible. Interest and penalties continue to accrue the longer you wait to file and pay. If you wait too long, the IRS may file a Substitute for Return on your half, potentially resulting in a large tax bill.
- You received this form on behalf of a deceased person: Give the form to the estate administrator. If the person died without an estate that goes through probate, you may not need to respond, but to be sure, you may want to consult with an attorney.
Common Form 15103 Mistakes
Avoid these common errors when filling out and returning Form 15103:
- Ignoring the form: If you do not respond, the IRS will likely proceed with a Substitute for Return, which allows them to collect the tax debt through liens, levies, and other collection actions.
- Checking that you have already filed, but not providing the IRS with a signed, dated copy of the return: The form requires a signed, dated copy of the tax return. Failure to provide one may still result in a Substitute for Return.
- Claiming that you didn’t need to file without explaining: The form provides space to include your reason for not filing. Failure to provide an explanation could still result in a Substitute for Return.
Unfortunately, any of these mistakes may result in an unwanted tax assessment, involuntary collections, and other adverse consequences.
Consequences of Failing to Respond
Not responding to Form 15103 can have a significant effect on your finances, which is why we recommend answering all IRS notices promptly. If you do not respond, the IRS will move forward by filing a Substitute for Return on your behalf. When this happens, you lose out on deductions and credits.
This typically results in a much higher tax bill than you’d face if you filed on your own. The IRS can then send you a Notice of Deficiency, and if you don’t respond or appeal, they’ll move on to aggressive collection efforts, including liens, levies, and wage garnishment.
In the meantime, your debt may continue to grow due to interest, the failure-to-file penalty, and the failure-to-pay penalty. You do have time to appeal the tax debt in an SFR, but only if you do so by the deadline. It’s always easier to deal with this problem when you’re at the stage of receiving the 15103 form.
IRS Form 15103 FAQs
Can I respond to Form 15103 Online?
No, the IRS requires you to mail back the form in the envelope they provided to the address mentioned on the form. You can track the progress of your submission in your online account and check if the IRS has processed the response or updated your account after receiving it.
Does Form 15103 mean I owe taxes?
Getting Form 15103 means that no tax has officially been assessed yet. The reason the IRS sends is to move forward the process of tax assessment, which at times can result in a balance due. There are also times when the form is sent in error, or you may not have been required to file.
Why don’t some people get a Form 15103 if they don’t file?
The IRS receives copies of income directly from employers, financial institutions, and other sources. If the IRS believes, based on this information, that the individual earned below the filing threshold, had no income reported, or was only due a refund, they may not send this form. Generally, receiving Form 15103 means the IRS believes they may be owed more money. The IRS also prioritizes high-income non-filers with these notices.
What if I don’t respond to Form 15103?
The IRS will generally file a substitute for return (SFR) for you. This means they will file the return with the information that they have available on you. The IRS generally doesn’t have all the information on you, which results in you owing more money than if you filed on your own, or getting a refund smaller than what you would have otherwise received. Once an SFR is filed, the IRS has a tax assessment, and if you owe, they will start the collection process.
When It’s Time to Talk to a Tax Professional
If you have a straightforward tax situation, you may be able to resolve this just by submitting the form to the IRS. For example, you may have filed your return already. In that case, you can provide a copy to the IRS and keep an eye on your online tax account to ensure that your return is processed.
However, if you have received multiple non-filer notices, know that you have multiple years of unfiled returns, or expect to have a large tax bill that you cannot pay, it’s time to talk to a tax professional. These situations can cause significant stress for taxpayers, and as you try to figure out how to proceed, interest and penalties continue to accrue. Working with a tax professional can save you time, money, and stress.
You should also talk to a tax professional if you believe that the IRS record is incorrect or that you did not need to file but do not know how to prove your compliance with IRS requirements. A tax professional can talk to the IRS on your behalf, provide the correct documentation, and help you avoid further IRS notices.
If you’ve received IRS Form 15103, the IRS may be preparing to file a Substitute for Return for you. Take this opportunity to correct IRS records or catch up on tax filings to avoid enforcement action. East Coast Tax Consulting Group can help protect your rights, reduce penalties, and explore different payment options. Contact us online or call us today at 866-550-7655 to schedule a consultation. We represent clients in Boca Raton, as well as throughout Florida and nationwide.
Sources:
https://www.irs.gov/pub/irs-pdf/f15103.pdf
https://www.irs.gov/individuals/understanding-your-cp59-notice
https://www.irs.gov/individuals/understanding-your-cp516-notice
https://www.irs.gov/individuals/understanding-your-cp518-individuals-notice
https://www.irs.gov/newsroom/what-to-expect-after-receiving-a-non-filer-compliance-alert-notice-and-what-to-do-to-resolve