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Tax Returns

Substitute For Return Causes IRS To Send A Bill For Unfiled Years

We regularly receive emails from taxpayers with questions regarding their IRS tax problems. Since many taxpayers face similar issues, we have decided to share one question and our response on a monthly basis, in the hope it can help others with back tax debt.

Question: I haven’t filed my tax returns for 2018, 2019 or 2020 and the IRS keeps sending me notices that I owe them $38,400. How can that be? I never even filed. What should I do?

Substitute For Return

Answer: When a legally required income tax return isn’t filed on time, the IRS can file a tax return on your behalf. It’s called a “substitute for return. Most of the time the resulting tax liability is much greater than if you filed your own return. This is because the IRS doesn’t give you credit for proper exemptions, credits nor (business) deductions.

The good news: The Tax Resolution Specialists at East Coast Tax Consulting Group can prevent this from happening, but you must act fast. Once retained we can replace the “substitute for returns” with originally filed returns if they reduce what you owe, which is normally the case. Once these returns have been filed, the next step is to negotiate a resolution with the IRS on the remaining amount owed. You will most likely be looking at one of several options – an Offer in Compromise, a properly structured payment plan, or currently not collectible (CNC) status.

Tax Relief Solutions

The Offer in Compromise (OIC) was created for people who owe the IRS but who, for whatever reason, are unable to pay their tax debt off, even over time. The Offer in Compromise allows taxpayers to negotiate a settlement amount that will take care of the entire tax debt once and for all. This settlement agreement can lower the tax debt by a significant amount, however there are strict eligibility requirements.

If you do not qualify for the OIC then you may consider a payment plan, which if properly structured, allows you to pay off your debt over time by making manageable monthly payments, much like a commercial installment loan.

When you’re unable to make any payments toward your back tax debt, and don’t qualify for an OIC, the IRS can put you in CNC status. You’ll remain in CNC status until your circumstances improve or the collection period expires.

We are experts at navigating the IRS maze and dealing with substitute for returns.  We’ll customize a resolution plan to fit your individual needs to help you permanently solve your IRS Problems. Call us today at 866-550-7655 for a free confidential consultation.

Contact Us 

You deserve the best in IRS tax representation, tax preparation, and tax planning services. At East Coast Tax Consulting Group, you’ll work with a licensed CPA who will handle your case from beginning to end. We invite you to contact our team to schedule a free, confidential consultation.