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What's Changing for IRS Non-Filers?

At ATBS, we talk to many truck drivers who are several years behind on their tax filing. While it can be easy to fall behind, it’s important to know how to get caught up and why filing is so important to your future financial health.

If you’re a truck driver who is behind on filing multiple years of tax returns and may owe thousands of dollars to the IRS, click here to learn more about how we can help, or give us a call at (866) 920-2827.

What happens if you don’t file your taxes?

For starters, when you don’t file your tax returns but your income source reports your income to the IRS, the IRS will file returns on your behalf. It can take them a few years to catch on to the non-filing, but once they do they will file returns on your behalf based on the income reported to them.

As an owner-operator where most of your income is reported on a 1099, this nearly always results in higher tax balances than you should actually be liable for. The reason for this, is that the IRS does not take into account any deductions you would be eligible for such as:

  • Fuel

  • Per Diem

  • Ordinary & Necessary expenses related to maintaining your truck and comfort on the road

When the IRS files on your behalf, we often see balances in excess of 150% more than our clients should actually owe. You can (and should) still file your returns if the IRS has filed for you, as you can reduce the tax balance by filing your actual return.

The bottom line is that filing as soon as possible – even if you can’t pay in full right away – is always in your best interest, rather than allowing the IRS the opportunity to file on your behalf.

How is this procedure changing?

Our tax resolution experts at ATBS spend a lot of time researching updates to IRS procedures and speaking with IRS agents regarding policy, practice, or focus changes. Building these relationships with the IRS provides us the best access to understanding the current and ever-changing environment internally at the IRS, and allows us the ability to better serve our clients.

In March of 2023, our Tax Resolution Manager had an in-depth conversation with an IRS agent who outlined a change in procedure in which we will be seeing the IRS allocate greater resources toward investigating taxpayers who do not currently owe back tax, but who have not filed in the last several years. They are focusing on folks who have income reported from 1099 income sources who have not filed their returns.

The IRS is assigning these cases directly to local IRS field agents who have been instructed to set strict deadlines to obtain tax returns – sometimes 6 years back in total. If those returns are not received, these agents are instructed to begin the process of filing for the taxpayer. This will result in quicker processing of Substitute Filed Returns and a fast escalation of taxes owed by folks who have not filed returns for the last several years.

What should be done to avoid running into these issues?

Avoiding these higher substitute balances is critical to…

  • Maintaining the integrity of your business functions

  • Preventing the filing of tax liens

  • Circumventing the requirement to pay higher taxes than you should be held liable for

A lot of folks are deterred from filing their back tax returns because they have either misplaced, or are unsure of, what information is needed to catch up. ATBS’ Tax & Tax Resolution Teams can assist in obtaining this information from the IRS if documents have been lost. Our Tax Team can also assist in completing your historical bookkeeping so that these original returns can be created.

ATBS is invested in assuring that the truck drivers with whom we work with have the best possible road ahead of them with the IRS. The IRS can cause many roadblocks to the sustainability of your business and can cause undue stress on your already limited home time. With ATBS’ assistance, there is no reason you can’t put the IRS behind you and keep them at a manageable arms-length distance moving forward.

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