Unfiled Tax Returns and IRS Visits

If you have unfiled federal income tax returns, you might receive a personal visit from an IRS employee.  The IRS recently announced that it hired additional Revenue Officers (IRS collection employees) who will be making house calls to taxpayers missing one or more returns in a prior year, and who earn over $100,000.  These unannounced visits began in February 2020.

The IRS has already contacted these non-filers by correspondence (generally by mail), notifying them of missing returns, so they should not be surprised to learn of their missing returns.  Eventually, face-to-face contact will be made.  Taxpayers can expect the Revenue Officer to provide two forms of official identification to prove they are in fact IRS employees and not scammers.

While the IRS’s focus for face-to-face contact are high-earning offenders, that does not mean the IRS is ignoring low-income earners with missing tax returns.  It is important for all taxpayers to get into compliance with their filing obligations, even if they cannot pay the taxes due.  The willful failure to file a tax return is a federal misdemeanor.  When evidence supports it, the IRS may use the fact of not filing tax returns to bring harsher, felony charges.  Since 2017, prosecutions of tax return non-filers have increased, according to the IRS’s Criminal Investigation division.

Aside from potential criminal exposure, non-filers should file missing tax returns before the IRS files returns for them.  “Substitute for Returns” or SFRs are returns the IRS files for taxpayers using income information received from third-parties.  These returns almost always report a higher tax due than if a taxpayer filed his/her own returns because they only allow for “single” filing status, and do not include all deductions and exemptions a taxpayer would otherwise be entitled to. 

If you have unfiled tax returns, be cautious.  Filing them just to get them filed, without having competent professional guidance from a tax controversy specialist, can be disastrous. 

If you have questions, contact Anderson & Jahde for help.

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