sfr, IRS, substitute return, tax notice

 unfiled tax returns, file late taxes, tax levy, wage garnishment, Letter 4903, LT-26

 

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The IRS prepares what they call a Substitute Return (SFR) for taxpayers who have failed to file a tax return, after a certain period of time.  The SFR is considered to be a legal document and can be used to impose wage garnishments or bank levies.

Even after, the IRS prepares a SFR, the return is still considered to have been filed late, and penalties and interest apply.

The only way to lower the tax liability on a Substitute Return, is to file YOUR own return.

If your return calculates to more owed, than what the IRS's Substitute Return shows, use your best judgment.        continue below.........

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SFR - Substitute for Return, IRS Tax Notice, Unfiled Taxes

The ONLY way to lower the tax liability on a "substitute return" is to file YOUR own return.

Once a taxpayer has received a Letter 4903 from the IRS, (LT 26) - He or she can expect that the

next step will be that the IRS will prepare a Substitute Return for the taxpayer.

The LT 26 or Letter 4903 will say:  "We do not have a record of receiving federal income tax returns for the years ......"  The IRS will provide additional information in this letter, in hopes that you will take the necessary steps to file your unfiled tax returns.  Usually you will have 10 days after the date on the letter to respond.  The IRS, informs you in this letter that, "they" will prepare the return for you.  You can contact the IRS by calling the telephone number listed in the Letter 4903.  

If you don't agree with the Letter which the IRS has sent you, you can contact them, and explain your situation.  If the IRS says, they have not received your tax return, it will be up to you, to provide a copy of the return, as soon as possible.

If you trusted a tax professional to e-file your return and you do not have a valid copy, you will need to provide the IRS with the necessary information, for them to give you more time to file the return.

Even if you mailed the return, yourself, it is best to take or mail a copy to the IRS, without hesitation. 

What if you file your return and the IRS Owes You?

If you file your back taxes within the 3 year window, of when the tax was due, the IRS, usually, will mail a refund check - unless you owe for previous years.  Based upon third party information from banks, employers and additional financial institutions, the IRS has a good idea on whether they owe the taxpayer, or, if the taxpayer owes the IRS.

If a new child was born, during the year, it would be best to file the past due tax return(s) in order to get the legal deductions.  When the IRS prepares, a Substitute Return, for a taxpayer, often times, unknown deductions are not included.

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