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When the IRS Files a Return for You, Can They Get It Wrong?

October 14, 2025
Weisberg Kainen Mark, PL
Summary

If you don’t file a tax return, the IRS will file a Substitute for Return using only your reported income without deductions, credits, or context. That inflated version often leads to a much higher tax bill than you actually owe. Filing your own return with accurate information can slash the liability and stop the IRS from collecting on the wrong number.

The IRS doesn’t wait forever. Fail to file a tax return, and they’ll make one for you. It’s called a Substitute for Return (SFR), and it’s not a favor. They include everything they believe to be your income, ignore any expenses, deductions and credits you may be entitled to, and send you the bill, which also includes penalties and interest. Thankfully, you still have an opportunity to correct what the IRS has done and file an accurate tax return resulting in a lower tax liability.

What the IRS Uses

When the IRS builds a substitute return, they pull whatever income data they can get their hands on, such as W-2s from your job, 1099s from contract work or bank accounts, and K-1s from partnerships. If it reports income, they’ll use it.

However, they leave everything else out.

They don’t include business expenses. No write-offs for travel, equipment, software, or anything else you actually needed to earn that income. They ignore itemized deductions like mortgage interest, medical bills,and  charitable donations. They don’t care about credits like the Earned Income Credit or Child Tax Credit. You won’t get credit for dependents, and you won’t get to pick your actual filing status. They usually assume you’re single with no kids and no deductions.

Which means your taxable income balloons, and so does your tax bill.

What Happens After the IRS Files a Substitute for Return

Once they file the SFR, the IRS assesses your tax based on the income they have come up with for you. They send you a Notice of Deficiency (often CP3219N) that shows the numbers they used and what they think you owe. If you don’t act, they lock it in and start billing.

From that point, penalties and interest compound fast. The meter’s running.

There’s no trial. No hearing. No warning beyond the notice. The IRS moves from creating a tax return for you, to assessing the tax liability against you, to doing everything it can to collect it from you.

How to Fix It Before It Gets Worse

The good news is that you may not be stuck with the IRS version of your tax return. You can file an actual return and request that the IRS use this instead of their version. That’s your best move.

A real tax return lets you report what you actually earned and deduct what you’re allowed to. If you had $75,000 in freelance income but $30,000 in legitimate business expenses, that makes a big difference. Throw in a few credits and the right filing status, and your tax bill could shrink drastically.

You can do this even after the IRS has assessed the tax. File a proper return, and they’ll usually accept it, revise the numbers, and lower your liability. They might even waive some penalties if you qualify for relief.

Whatever you do, don’t ignore IRS letters. Respond within the deadlines. The longer you wait, the fewer options you have.

Don’t Let the IRS Decide What You Owe

The IRS is good at collecting. They’re bad at being fair. Especially when they’re working off half the facts and none of the context. An SFR is not a final decision. It’s a starting point, even if it’s a flawed one.

But it can become permanent if you sit on it. The faster you act, the more money you save. File. Correct the record. Reduce the damage.

If you’ve received a Notice of Deficiency or think the IRS filed a return for you, don’t waste time. That substitute return is an inflated invoice waiting to turn into wage garnishment, levies, or worse.

Weisberg Kainen Mark helps clients file accurate returns, fight inflated assessments, and push back against IRS overreach. Call (305) 374-5544 to set the record straight before the IRS locks in a number that isn’t yours

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Weisberg Kainen Mark, PL

As experienced trial lawyers with a passion for justice, our firm provides clients with compelling advocacy, attorney availability, and creative solutions to your tax or criminal law matters.

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