IRS Is Restarting Substitute for Return Program

IRS Is Restarting Substitute for Return Program

The Trucker CFO Team would like to make a special outreach to anyone who has unfiled tax returns. If you have followed our newsletter, or if you have been listening to our podcasts and the radio appearances by Trucker CFO Colton Lawrence, you know that we have essentially been shouting the following from the rooftops: THE IRS IS COMING.

The reality is that practically every week we are receiving an increasing amount of correspondence and phone calls from the IRS. Basically, the hibernation period for the IRS that has lasted for the past two and a half years is coming to an end. As the IRS ramps up operations in a post-COVID landscape with thousands of additional agents, those people who have unfiled returns should be especially concerned.

If you believe that you are on the list of taxpayers with an unfiled return, you need to know that the IRS is restarting its SFR program, and you should also know that SFR does not stand for “Super Fun, Right?” For the IRS, SFR stands for Substitute for Return, and the SFR program is far from fun for the taxpayer that has an unfiled return.

Why is the return of the SFR important?  The only way the IRS can collect (issue liens, garnish wages, issue levies) is to have an assessment.  The only way to have an assessment is if the taxpayer files a return OR if the IRS files a return for you. And the Substitute For Return is utilized when the IRS files for you so the U.S. Treasury Department can start to collect what you as the unfiled tax payer owes.

The SFR is actually a pretty simple process. The IRS uses the taxpayer’s income from 1099s, allowing no business expenses. The IRS then files the taxpayer in the worst filing bracket, tacking on penalties and interest.  

In recent weeks, the Trucker CFO Team has received calls from numerous potential clients that have received SFR assessments from the IRS. In one case, the taxpayer made $178,551 on their 1099. With no expenses, the balance due is $57,741 with an additional $43,528.77 in penalties for a total balance due of $101,269.77.

If that didn’t catch your attention, how about this example? The individual taxpayer made $244,692 on their 1099. The balance due without expenses (fuel, lease payments, insurance, per diem) is $86,642. Now that balance due total also comes with an additional $66,198.50 in penalties, making the grand total reach $152,840.

Quite obviously, these cases are no fun for the individuals involved. In addition to the returns needing to be filed, a petition in tax court needs to be filed and a conference with a settlement officer in the Appeals department will need to be made. The simple solution is for the taxpayer to file their return with the proper expenses before it gets to this point.

No matter how scary the IRS may seem, it is always best to get in front of your tax issues. Don’t wait for the IRS to file your return for you. We have years of experience at Trucker CFO and we have handled thousands of tax problem cases. Even if the return had a balance due, there are solutions much easier to solve than a return once the SFR process starts.  

With each of our cases, we contact the IRS, request transcripts and put together a game plan to get the returns filed and tax issues resolved. Don’t be lulled to sleep by the ineffective, sluggish, dormant, overworked IRS – something that was particularly the norm as the COVID pandemic hit.

It’s a new day and the times are changing. The IRS is waking up. The agency is adding personnel and the IRS is starting to collect again. The Trucker CFO is ready to help walk with you through this new day and increased enforcement by the IRS. If you have unfiled returns or other back tax issues, we would like to invite you to reach out to our Tax Resolution Department. We can work with you to put together a plan now before the IRS does something drastic like file a SFR for you.

Give the Trucker CFO Team a call today at 800-533-4320 and ask to speak to our Tax Resolution Department. Schedule a consultation with a member of the Trucker CFO Team and ask us any questions you want. We can explore your specific situation and work with you on taking the first step.

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