When you owe the IRS, or haven't filed returns and might owe

In our 30 plus years, we’ve found that nothing gets non-filers’ attention more than when the IRS notifies them of a balance due. Without returns, the IRS has to file SFRs (“Substitute for Returns”) to create a balance, and this type of case is one of our most frequent.

How is an SFR created? Here’s an example:

If you had filed this return with deductions you’d owe a lot less, but the IRS can’t guess deductions for you and now you’re stuck with a greater tax liability.

The first question we’ll ask in every SFR case: should we replace the SFRs with returns and reduce the balance, or let the SFR numbers stand and try to get a settlement around those unfiled returns?

To start, our experienced staff will need to research your IRS record and file Power of Attorney to stop collections. Further work will involve preparing the unfiled returns (if replacing SFRs), filing an Offer in Compromise, declaring Uncollectible Status, or negotiating a livable payment plan.

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