Whether you have un-filed tax returns, you owe the IRS back taxes that you cannot pay, or you are the target of a tax collection action such as a wage levy or asset seizure- you’re not alone. There are hundreds of thousands of taxpayers who owe back taxes.
When you owe the IRS or the State taxes, time is not on your side. Problems can arise from filing late returns for both IRS and state taxes such as liens, wage and bank levy, and large tax penalties with interest. You may have even filed your Internal Revenue Service tax return on time but were not able to pay the bill.
If you don’t file your returns, The IRS may file for you. When a taxpayer does not file a return for one or more years, the IRS will often file the return(s) for them. When the IRS files a Substitute Filed Return (also known as an SFR) most often the taxpayer ends up owing significantly more in back taxes than if they had filed themselves. Frequently, IRS SFR’s do not take into account all of the allowable exemptions and deductions available to the taxpayer. In fact, they usually do not take any of the deductions that a small business would (such as travel, office supplies, vehicle expenses, utilities, etc).
When the IRS files a return for you, they are not doing so to make your life easier or to do you a favor. Without a return filed, no tax debt will officially show up in the IRS records. The IRS files SFR’s so that they can assess a tax debt to delinquent filers, contact them about their past due tax returns and begin collection activity if necessary.
When the IRS has filed an SFR for a taxpayer it is often beneficial to the taxpayer to re-file the return and have the back tax debt assessed properly. For people with large amounts owed, re-filing can often reduce the amount of taxes to a level which is more reasonable to pay back. In some cases it may be more beneficial to the taxpayer to accept the SFR filed by the IRS- we can help you determine the best solution for you. It is important to consider what your overall plan is to resolve and pay back the tax debt before deciding whether or not to re-file SFR returns.
Manning & Associates specializes in assisting small businesses and individuals with back tax returns and debt. We will analyze your tax situation and can file back tax returns for you if you have had tax returns filed by the IRS. For taxpayers who no longer have access to their back tax records or who have lost or missing tax records, Manning & Associates can order many of these records for you and work to prepare a legal tax return that will be accepted by the IRS.
Give us a call today at (253) 752-3920 for a consultation about your business or personal finances.