Famed Day Walker and Vampire Slayer Wesley Snipes is currently serving a three-year prison sentence for tax evasion. Poor Blade. A well known tax protestor, Snipes was charged with six counts of willfully failing to file federal income tax returns by their filing dates, among other serious tax crimes. Most “non-filers” are not punished so severely. (By the way, isn’t protesting taxes synonymous with yelling at tornadoes or picketing rainstorms? In either case, there’s not much we can do to change those circumstances, or our responsibilities as taxpayers.)
However, the IRS does take non-filing very seriously. In the most flagrant cases, criminal prosecution has been recommended to those individuals that willfully fail to file tax returns. For non-filers that fail to respond to IRS requests for missing tax returns, the Service can get medieval. Internal Revenue Code 6020(b) allows the IRS to prepare returns and secure tax liability assessments from non-filing taxpayers who have an open filing requirement and do not file a return as required. This process is called a Substitute for Return (SFR). While the SFR may be no match for Jon Cena and his superstar wrestling buddies in the WWE, it is certainly a potent weapon in the IRS’ arsenal. The SFR certainly delivers the compliance equivalent of a Pile Driver, if you will.
An SFR will often generate a tax liability much larger than that of the original tax return, if it had been filed timely by the taxpayer. In SFR cases, a delinquent taxpayer may lower his/her tax debt significantly and may even eliminate it altogether by simply preparing and submitting the missing, original tax return to the Service. For those that owe the IRS back taxes, whether business or personal, filing all missing returns to gain compliance is vital.
It is IRS policy that a delinquent taxpayer must have all tax returns filed before a resolution to back tax liabilities will be considered. Remember, full compliance is a prerequisite to all Installment Agreements, Offers in Compromise, and Currently Not Collectible status resolutions.
M&M recently secured a formal IRS Installment Agreement for a North Carolina business that came to us owing approximately $70,000. In our initial research, we determined that the business had several 941 payroll tax returns that were not filed by our client. The IRS had created SFRs and assessed a massive payroll tax liability to the business. After the original 941 returns were filed by our client and processed by the IRS, the tax debt had decreased to about $6,000. Our client now pays $400 per month to satisfy the remaining tax liability. Click here, to find more of M&M’s North Carolina client resolutions.
M&M Financial specializes in resolving business tax debts stemming from delinquent payroll tax. M&M’s Tax Resolution System is designed to locate compliance issues such as SFRs, ensuring the best possible results for our clients. Complete our contact form at http://mmfinancial.org/contact.html, or call us at 866-487-5624 to find out how M&M’s Tax Resolution System can help you.