Stop IRS Action with SFR Protest

If you don’t file your tax returns, eventually the IRS will, based upon information about your gross income reported on a 1099, W-2’s, stock sales, sale of home and reported interest and dividends. These returns are referred to as SFR’s for substitute for return by the IRS. These returns are almost always incorrect and usually grossly overstate the true amount of taxes owed.

Many clients come to us with large SFR balances due that turn into refunds. Remember that a refund that is older than three years is permanently lost and cannot be apply towards a balance due. SFR balances cannot be discharged in a chapter 7 bankruptcy. Only a return filed by a taxpayer can be included in a tax motivated bankruptcy. There is a waiting period for this to happen. The return must be filed for two years and it be three years from the due date and no IRS adjustments in the last 240 days.

If you have filed previously a joint return, the IRS will file an SFR using the married filing separate status which eliminate lots of tax advantages and has a higher tax bracket than married filing jointly. The IRS gives not credit on SFR’s for dependents, mortgage interest, property taxes, charitable donations, auto license fees and deductible medical expenses to name just a few.

If you know that the IRS has filed SFR’s against you but you haven’t been contacted by them, consider yourself lucky and get your returns filed as soon as possible. It can take several months for the SFR unit to adjust your assessed taxes down to its correct balance and the IRS will take collection action on the higher balance until this occurs. Consider calling Scott Allen EA to handle this process for you. He will have to sign Power of Attorney so we can represent you from start to finish. He will make today a great day for you!

Scott Allen E. A.

Tax Debt Advisors, Inc