Monthly Archives: October 2015

Substitute for return

Substitute for Returns



The IRS has the ability to prepare and file returns for you if you choose not to file (Internal Revenue Code 6060).  This is commonly known as an SFR.  In most cases, it is a disadvantage to have the IRS do this.  Typically, the IRS will allow you one exemption, no dependents, and only allow the standard deductions on the return they file for you.  Furthermore, the IRS will calculate your tax liability for you, usually from your W-2s and 1099s.  The IRS may also impute income to you based upon tabled furnished by the Bureau of Labor Statistics showing the income necessary to sustain the lifestyle in your community.  This can result in a much higher tax bill than you would have had if you or a professional prepared your return.

If the IRS prepares an SFR, it will mail it to your last known address asking you to sign it and return it.  It may not be in your best interest to sign such a return and if this does happen to you, you should contact a tax professional immediately.