It's very important to understand the consequences of not filing past due returns and the steps the IRS can and will take. The most common approach the IRS takes is to file a Substitute for Return "SFR." A SFR is exactly how it sounds, a return the IRS files on your behalf without your approval. Because it is the government filing the return on your behalf, the only deductions you’ll see are standard deductions and one personal exemption.
You will not get credit for deductions to which you may be entitled such as exemptions for your spouse or children, deductions for interest and taxes on your home, cost of any stock or real estate, business expenses and more.
You do have the ability to file an original return even if a SFR has been filed. It is unlikely, but in some circumstances the IRS may construe your failure to file tax returns as tax evasion. This is a criminal act punishable by a prison sentence for each year a return is not filed. Therefore, if you have not filed your tax returns contact a tax representative at Wolf Tax to help guide you through the process of getting into compliance.
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