Otherwise, he adds, you will learn the ABC’s of the SFR by the IRS.
Houston, TX (PRWEB) April 7, 2006
The April 15th tax filing deadline has always been synonymous with three alphabetical letters which everyone knows as the IRS. Yet, there are three other alphabetical letters that are equally important to the April 15th tax filing deadline that fester anonymously. These other three noteworthy alphabetical letters are the initials SFR and they can lead to big tax trouble if taxpayers aren’t familiar with them. The term SFR is an apparatus used by the IRS which stands for Substitute For Return. What the letters SFR really spell out is that the IRS can file a tax return for taxpayers who do not file a tax return on their own.
Jeff Welch, President of You File, which operates the website http://www.you-file.com where taxpayers can go to electronically prepare and file tax returns has a warning for taxpayers. “Do not miss the April 15th tax filing deadline because the IRS uses the SFR program to file tax returns for taxpayers who do not file one for themselves.” Welch points out that Section 6020 of the tax code allows the IRS to file a substitute tax return for taxpayers who do not file a tax return voluntarily. Welch refers to an online statement by the IRS that says, “IRS employees will prepare returns when taxpayers do not file.”
Welch says the financial impact of the SFR program can be significant to taxpayers because the substitute tax return is essentially a skeleton tax return which doesn’t include items like exemptions, deductions and credits. Thus, the IRS uses the SFR to compute tax liability on earnings and doesn’t take into consideration all of the other items on a regular tax return. Taxpayers don’t often realize that a substitute tax return was filed by the IRS until years later, says Welch. Frequently, by the time a taxpayer realizes that an SFR was filed for them, the taxpayer has incurred significant penalty and interest on the SFR tax amount. Consequently, the result of an SFR can lead to collection activity by the IRS. Welch reports that the only real cure for the SFR is to file a tax return. Ideally, by the April 15th tax filing deadline. “Otherwise, he adds, you will learn the ABC’s of the SFR by the IRS.”
You File is an online resource to help taxpayers stay in compliance with the IRS on tax related matters. Interested individuals can visit http://www.you-file.com for more information on tax issues or to file a tax return using an industry leading software before the April 15th tax filing deadline.