Haven't filed a tax return in awhile? You may owe the IRS!

If you haven't filed a tax return in a few years, you may still owe the IRS. You may have even been suprised when you received a Balance Due Notice in the mail from the IRS for years you haven't filed.

The reason for this is the SFR. An SFR stand for Substitute for Return. When you go more than 2 years without filing a return, the IRS might prepare a return for you. They will file you single with standard deductions. You will not get any other deductions that might be beneficial to you. Once they prepare a return for you and you owe tax, they will file that return and assess the tax against you. If they prepare a return for you and you are due a refund, they will not file that return. Thus, you will not get your refund. It is not in the best interest of the Treasury to hand out money on returns not filed by the tax payer.

Once your tax has been assessed, they will put you in the collections letter cycle.

Even though you have a SFR, you can still file a return on top of it with all of your deductions included and you correct filing status. This will file over the SFR and adjust your tax liability, but it will take months to process, so in the meantime, you need to be in a resolution with your supposed liability or the IRS will enforce collections (even if your return shows you don't owe). Doesn't seem fair but that's the way it is.

This is one of those areas where professional representation might be your best bet. It is very tricky when filing over SFRs and when filing old returns. If your returns don't match up to IRS records, you will be red-flagged for an audit for sure, delaying the whole process and even resulting in more penalties.

Levy notice from the IRS and what it means to you.

Like so many tax payers, this could happen to you. You get a certified letter form the IRS. When you pick it up from the post office and open it, you read that the IRS intends on levying certain assets.

Don't panic!

This means that you have not responded to the IRS's other letters they have been sending you. The IRS can not levy you until you have been through the collection due process. Simply put, they have to notify you of a balance due and give you time to respond.
If you get a CP 504, intent to levy, there is still time to handle your problem.
You do need to get moving right away, because doing nothing will only result in the IRS taking your assets away.

If you are unsure of what steps to take next, it might be time to hire a reputable tax resolution firm. A tax resolution firm can help you out tremendously; they know how to deal with the IRS and can get you back onto the road to recovery and peace of mind.