If you don’t file a tax return, the IRS may file for you with something called a Substitute for Return to determine the amount you owe them. A substitute for return is the IRS’ estimation of what you owe for that year. They use past returns, as well as income reported by your employer(s) to approximate your return and how much you owe.
When filing a substitute for return, the IRS will not take responsibility for including every deduction and credit that you may qualify for that year. Consequently, the estimations are usually pretty high. The purpose of the substitute tax return is to make an estimate of how much you owe so they can begin collection actions.
This is another reason that you don’t just want to avoid filing to try and avoid paying. Not only will the IRS apply a stiff failure-to-file penalty, but they’ll estimate what you owe so they can collect anyway.
Need back tax help in Kansas City? Bank account levied in Kansas City? Paycheck garnished in Kansas City? Lien on business or home in Kansas City? If you or a client need help fighting off the IRS, call Jeffrey R. Siegel, your Kansas City tax attorney. We help with IRS liens, wage garnishments, levies, offers in compromise, innocent spouse relief, federal employment tax, Trust Fund Recovery Penalty and installment agreements. Bring back some stability to your life, and call (913) 735-4829.