The IRS has announced plans to hire more agents in order to increase enforcement against non-filers. This means that if you haven’t filed your taxes in a while, you may be at a higher risk of being audited or facing enforcement action.
One of the main ways that the IRS enforces compliance against non-filers is through the preparation of substitute for returns (SFRs). An SFR is a tax return that the IRS prepares on your behalf if you haven’t filed your own tax return. The problem with an SFR is that the IRS doesn’t give you credit for any deductions or credits. This means that the taxes owed on an SFR are typically higher than they would be if you had filed your own return.
For example, if you’re eligible for certain deductions or credits, such as the Earned Income Tax Credit, but the IRS doesn’t give you credit for them on an SFR, you’ll owe more in taxes. Additionally, if you had losses or other deductions that are not included in the SFR, you will also owe more taxes.
Furthermore, if the IRS determines that you owe taxes and you don’t pay them, they can take enforcement action against you. This can include wage garnishments, bank levies, and liens on your property. The IRS can also take action against your business, such as levying your business bank accounts, garnishing your business wages, and placing liens on your business assets.
The best way to avoid these enforcement actions is to take action to get into compliance with the IRS as soon as possible. This may include filing missing tax returns, negotiating a payment plan, or seeking relief through an offer in compromise. A tax professional firm can help you understand the different options available to you and work with the IRS to create a resolution that fits your circumstances.
In conclusion, with more IRS agents being hired, there will be greater enforcement against non-filers. The IRS will be preparing substitutes for returns where the taxpayer doesn’t get credit for any deductions or credits, making the taxpayer owe more in taxes. The best way to avoid these enforcement actions is to take action to get into compliance with the IRS as soon as possible. A tax professional firm can help. LBS Tax Services has worked with hundreds of non-filers, and we have strategies to help clients get relief from the IRS.