The IRS is telling me that they are in the process of filling a substitute for return.?

Question

I will have my late tax return filed by the end of april (no exceptions). The IRS says they may not accept the return. Do I have any defense against this?

If you are hoping to receive a refund on a return that will be over three years old by 4/17/2007, that means you will lose your refund.
If you are just delaying filing because you owe, just bite the bullet. Your return will probably be better for you than theirs.....

You already know it's late. Stop procrastinating and mail that thing.....

good luck

Source(s):

imho - mucho tax experience

I appreciate your help. No I am not expecting a refund and yes I know I am late. They say that their substitute for return will over ride my return. The sub will show about 300k of stock profits that I didn't have because there will be no expense basis and none of the trades that were losses associated with them. Can anyone give me a more defined answer?

Answer 1

File the missin return as you would have had you filed on time. as long as you can substantitate the information of the return, they should process it as you submit it. But get it in and get it in NOW. you have had years to prepare and file this return. Send it to the person that you have been dealing with at the address on the letter advising you of the substitute return. For more assistance you can call the Taxpayer Advocates office at 1-877-777-4778

Answer 2

Without knowing all of the facts it's pretty hard to say.

I can only guess that this is a return for a prior year and that you failed to claim the gain on some stock transactions for which there were $300k in proceeds reported on a 1099B. Either that or you just didn't file a tax return for that year at all.

When that happens, the IRS files a substitute return and calculates your tax for you. In the case of a stock sale, they'll use a basis of $0 since they don't have your cost information. Heck, if you had paid $325k for the stock you'd have a loss but the IRS doesn't know that because you either failed to file or neglected to list the stock sale(s) on your Schedule D for that year. That's why it's SO important to file a timely return!

What you should do is IMMEDIATELY file either the missing return -- or if you filed an incomplete return, an amended return -- and properly claim that stock sales using the correct basis from your records. Do NOT wait until the end of April to sort this out! Do it NOW!

Answer 3

Your return will probably be better for you than theirs.....

You need to get the cost basis on your stocks, bonds, and trades. You need to know how much it cost for the administration of such.
The only thing reported to the IRS is the actual Sale. They have no idea what your cost basis is - you could've inherited for all they know.
Once you count your basis against your sales, the amount is going to change tremendously.
Did you have a professional do your taxes that year? If they did, it will be easier for you to return to them and get their help.
The brokerage firm which handled your trades can dig up the old information of what shares cost at the time, and/or if it was employee purchased or something like that the HR dept. should be able to get that for you.

Good Luck

Answer 4

File it now and if you owe money let them bill you and pay when you can or fill out a payment plan form