If you are among the taxpayers who have not filed their returns for many years, you may find the idea of getting in touch with the IRS very daunting. However, you do not need to panic. The IRS will bite at you, but welcome you back enthusiastically.
In such cases, the IRS will file your returns, which are referred to as Substitute Filed Returns (SFRs). Once they do so, they will send you a tax bill with tax assessments that results from the SFRs. Unfortunately, the amount on that tax bill will be much higher than if you had filed your returns yourself because the IRS will not include any exclusions, deductions, or credits to your returns. The IRS files SFRs for the purpose of seeking your attention. The tax bill that results from an SFR is valid until you send in your proper tax return. In addition to that, it cannot be thrown out if you are bankrupt.
If you are a self-employed taxpayer, you will have to put together all your expenses and income before you fill your 1040 or Schedule C. In this case, you might need to employ a bookkeeper to help you prepare your statement for all your profits and losses. The IRS will permit you to make approximations that are sensible in the event that you do not have your records.
If you have your records, you can simply file your tax returns. However, if the necessary records are missing, you may want to seek some help. You can request certain transcripts from the IRS to retrieve your income information. However you might need to wait a long while before you get the response you need, because it will take some time for the IRS to process your request.
Therefore, to avoid the extra hassle, it is advisable to hire a tax preparer to gather these documents for you because they will do it faster than if you opt to do it yourself. You will be required to sign a Form 2848 (Power of Attorney and Declaration of Representative) which will give your tax preparer the authority to request your tax information. Once you do, you will never be required to talk to any IRS official directly. If they happen to contact you, all you need to do is redirect them to your tax professional. Once you have signed a Form 2848, you will be provided with all your income tax data.
