DID THE IRS PREPARE YOUR TAX RETURN, A SUBSTITUTE FOR RETURN?
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Internal Revenue Code 6020(b). Return prepared by the Internal Revenue Service because the taxpayer did not file a tax return.
IRC 6020(b), Substitute for Return Case Processing. The Law and the Authority.
- When a taxpayer refuses to file an employment tax return, the return may be prepared by the Service under the authority of IRC 6020(b) in either of the following two ways:
- Collection personnel prepares a tax return that reflects the proposed tax for assessment under IRC 6020(b) case processing procedures; or
- Compliance personnel, IRS Staffers, generally use “substitute for return” procedures with the proposed tax shown as a liability in the examiner’s report.
- Cases developed under either method may be protested to Appeals.
- A Technical Advisory Unit of the Internal Revenue Service reviewer reviews Area office cases prior to transmitting them to IRS Appeals.
- On all agreed cases Appeals requests that the taxpayer sign the prepared tax return. If the taxpayer agrees to a revised tax, request the taxpayer sign a new return. In either case, the return is marked “Delinquent”.
- Unagreed cases:
- Employment tax cases ( 941, 944 ) cannot be litigated in the Tax Court. Therefore any unagreed employment tax case is assessed without issuing of a notice of deficiency. The proposed tax return prepared by the originating office, or a revised tax return prepared by the IRS Agent is processed for assessment.
- The IRS Agent signs, dates and prints his/her title on the “Date, Signature and Title” line of the return. The following statement is typed or printed below the signature:”This return was prepared and signed under the authority of Section 6020(b) of the Internal Revenue Code”. The person signing this tax return must have the authority to prepare such a tax return. The authority is not given to a lower GS personnel. For information on application of the failure to file and failure to pay penalties, see IRM 20.1.2, Failure to File/Failure to Pay Penalties.
Under the Internal Revenue Code, the IRC 6020(b) provides a way to prepare returns and secure assessments from non-filing taxpayers who:
- Have an open filing requirement
- Do not file a return as required
- After receiving letters from the Internal Revenue Service, failed to reply to the Services request to file tax returns
How and why does the Internal Revenue Service process Business Returns IRC 6020(b), when the taxpayers have failed to file:
- Internal Revenue Code 6020(b) is the authority given to the Commissioner of the Internal Revenue Service to prepare and process returns for non-filing business taxpayers.
- Delegation Order No. 182 (Rev. 7), extends 6020(b) authority to Internal Revenue Agents; Tax Auditors; Revenue Officers, GS-9 and above; Collection Support Function Managers, GS-9 and above; Automated Collection Branch Unit Managers, GS-11 and above; Customer Service Collection Branch Managers, GS-10 and above; and Tax Resolution Representatives, GS-9 and above.