The IRS computer works 24/7 seeking out individuals who have not filed previous year tax returns.  The computer matches W2s and 1099 income information and interest from your bank accounts against tax returns that you may or may not have file.  

If the IRS computer fails to locate a return that matches the information provided to the IRS by your bank, employer or client (1099) — the computer then begins the task to find out why the taxpayer didn’t file a tax return, and a series of notices are sent out requesting that the taxpayer file the previous year return.  

If the taxpayer doesn’t respond, the IRS computer notifies an IRS human (Taxpayer Service Representative) Depending on the seriousness of the non-filed tax return the file may be assigned to a Revenue Officer at your local IRS office.   At some point, if the taxpayer doesn’t respond to the IRS communications, the IRS will prepare a tax return for the taxpayer. This is called a “substitute return” When preparing the “substitute return” the IRS won’t include deductions or add additional exemptions that the taxpayer may be entitled to.  

The only way to get the tax liability changed, (lowered) on a substitute return is to file an “actual return”  For many taxpayers the “actual return” lowers the taxes owed and in some cases generates a handsome refund.   It is always better for a taxpayer to contact the IRS in reference to non-filed tax returns. It may take 18 to 24 months before the IRS contacts a taxpayer, however, penalties and interest accrual daily. Plus the IRS, have been known, not to criminally prosecute those who file before being contacted.  

For clarification and exact tax codes pertaining to the above article, visit:

Cassandra Ingraham is an Online Tax Accountant and Web Manager for the Online, Back Tax Service at A site where taxpayers can find affordable help with filing past due returns and the IRS Installment Agreement Request.