{"id":121,"date":"2024-07-08T18:16:19","date_gmt":"2024-07-08T18:16:19","guid":{"rendered":"https:\/\/www.andrewsamaniego.com\/blog\/?p=121"},"modified":"2024-07-08T18:16:20","modified_gmt":"2024-07-08T18:16:20","slug":"substitute-returns-why-they-cant-be-discharged-and-what-it-means-for-you","status":"publish","type":"post","link":"https:\/\/www.andrewsamaniego.com\/blog\/substitute-returns-why-they-cant-be-discharged-and-what-it-means-for-you\/","title":{"rendered":"Substitute Returns: Why They Can\u2019t Be Discharged and What It Means for You"},"content":{"rendered":"\n

Happy Monday, folks! As we gear up for a new week full of potential and growth (both personally and professionally), I\u2019m excited to share a bit of my own news\u2014I\u2019m starting a YouTube channel! That\u2019s right, I\u2019ll be diving into the world of video to bring tax solutions right to your screen, helping turn those tax problems into tax triumphs.<\/p>\n\n\n\n

Now, onto a less thrilling but critically important topic: Substitute for Returns (SFRs) by the IRS. Understanding this could save you a lot of headaches down the road.<\/p>\n\n\n\n

What is a Substitute for Return (SFR)?<\/h4>\n\n\n\n

Let\u2019s set the scene: you\u2019ve missed filing your taxes for one reason or another. Instead of letting it slide, the IRS steps in and files a Substitute for Return. This might sound like a helpful service, but don\u2019t be fooled\u2014this is the IRS’s way of ensuring they get what they believe you owe, and it often doesn\u2019t work out in your favor.<\/p>\n\n\n\n

An SFR typically only includes the basic information the IRS has about your income from sources like your W-2s and 1099s. What does it miss? Pretty much everything that could benefit you. Deductions, credits, exemptions\u2014you name it, it\u2019s likely not included. The result? A higher tax bill than you might actually owe.<\/p>\n\n\n\n

Why Can\u2019t SFRs Be Discharged?<\/h4>\n\n\n\n

Here\u2019s where it gets even stickier. A tax debt from an SFR is particularly tough because, under the law, these cannot be discharged in bankruptcy under most circumstances. Why? Because the tax return was not filed by you, the taxpayer, and bankruptcy law requires that you file a tax return for the debt to be dischargeable.<\/p>\n\n\n\n

This means if the IRS has filed an SFR on your behalf, you\u2019re stuck with this debt unless you take action. It\u2019s a ball and chain on your financial freedom, potentially preventing you from clearing your slate even in dire circumstances.<\/p>\n\n\n\n

What Can You Do About It?<\/h4>\n\n\n\n
    \n
  1. File Your Actual Return:<\/strong> If you\u2019ve had an SFR filed, it\u2019s not the end of the world, but you need to act quickly. You can still file your actual tax return to replace the SFR. This is crucial because your own return will likely include all the deductions and credits you\u2019re entitled to, potentially reducing your tax liability significantly.<\/li>\n\n\n\n
  2. Consult a Tax Professional:<\/strong> Navigating SFRs and their implications can be complex. Professionals like myself, Enrolled Agents who specialize in tax resolution, can help you understand your options, file your overdue returns, and even negotiate with the IRS to get penalties reduced.<\/li>\n\n\n\n
  3. Stay Compliant Going Forward:<\/strong> Once you\u2019ve addressed the SFR, ensure you stay on top of your tax filings in the future. Keeping current with your tax obligations prevents the IRS from stepping in and taking matters into their own hands again.<\/li>\n<\/ol>\n\n\n\n

    Wrapping Up<\/h4>\n\n\n\n

    As we launch into new endeavors, like my upcoming YouTube channel, it\u2019s important to remember that dealing with something like an SFR head-on is always better than letting it fester. The IRS doesn\u2019t create these substitute returns for your benefit\u2014they do it for theirs. By taking control of your tax situation, you ensure that you\u2019re not paying more than you need to and protect your financial future.<\/p>\n\n\n\n

    Stay tuned for more insights on my new YouTube channel, and remember: every tax problem has a solution. You just need the right tools and knowledge to find it. Cheers to a productive week ahead, and let\u2019s tackle those tax issues together!<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    Andrew Samaniego, EA,<\/strong> CTRC<\/strong>, MSCTA<\/strong><\/p>\n\n\n\n

    Andrew Samaniego Tax Planning & Resolution<\/strong><\/p>\n\n\n\n

    (619) 268-1084<\/a>  |  AndrewSamaniego.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Happy Monday, folks! As we gear up for a new week full of potential and growth (both personally and professionally), I\u2019m excited to share a bit of my own news\u2014I\u2019m starting a YouTube channel! That\u2019s right, I\u2019ll be diving into the world of video to bring tax solutions right to your screen, helping turn those […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[15,31,9,10],"tags":[16,21,26,20,14,13,32,11,19,12],"class_list":{"0":"post-121","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-back-taxes","7":"category-non-filer","8":"category-tax-debt","9":"category-tax-resolution","10":"tag-back-taxes","11":"tag-enrolled-agent","12":"tag-ftb","13":"tag-irs","14":"tag-non-filers","15":"tag-penalties","16":"tag-substitute-for-return","17":"tag-tax-debt","18":"tag-tax-issues","19":"tag-tax-resolution","20":"entry"},"_links":{"self":[{"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/posts\/121","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/comments?post=121"}],"version-history":[{"count":1,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/posts\/121\/revisions"}],"predecessor-version":[{"id":124,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/posts\/121\/revisions\/124"}],"wp:attachment":[{"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/media?parent=121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/categories?post=121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.andrewsamaniego.com\/blog\/wp-json\/wp\/v2\/tags?post=121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}