Substitute Return

AAA

DEFINITION of 'Substitute Return'

A tax filing that the IRS will create for a taxpayer in order to preliminarily calculate the tax due, if a taxpayer neglects to file his or her own return. The IRS creates a substitute tax return by using the tax form data that it has received about you from your employer, bank and other sources. Since the tax forms received by the IRS do not include all the relevant tax data, a substitute return will likely be inaccurate and may not reflect all the items of income, deductions and credits that should be on the return.

INVESTOPEDIA EXPLAINS 'Substitute Return'

The creation of a substitute return is typically done only for taxpayers who are significantly delinquent in filing a return. The substitute return is then used as a basis for imposing penalties, interest charges and initiating collection processes against a taxpayer's wages, bank account and property if the taxpayer is found to owe further taxes. The IRS advises that even if a substitute return has already been created in a taxpayer's behalf, the taxpayer should still file a return so that all of the correct income, deductions and credit items are claimed.

RELATED TERMS
  1. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  2. Return

    The gain or loss of a security in a particular period. The return ...
  3. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  4. Income Tax

    A tax that governments impose on financial income generated by ...
  5. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  6. Form 8949

    An Internal Revenue Service form implemented in tax year 2011 ...
Related Articles
  1. Taxes

    How To Appeal Your IRS Audit

    The auditor's review isn't always the last word. Many taxpayers who are audited can successfully appeal their audits and save thousands of dollars.
  2. Taxes

    Inaccurate Tax Return, Now What?

    If the IRS finds errors, it will cost you. Find out how to fix them, and how to prevent them in the first place.
  3. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  4. Taxes

    Should You File An Early Tax Return?

    When it comes to filing your taxes, it can often pay to wait until the deadline.
  5. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  6. Options & Futures

    When You Can't Pay Uncle Sam

    If you can't pay your taxes, there are some steps you can take to protect yourself. Discover your options here.
  7. The Internal Revenue Service's new 2015 contribution limits for tax-deferred savings plans are higher; here's what you and your clients should know.
    Investing Basics

    New 2015 Contribution Limits: Advisors Take Heed

    The Internal Revenue Service's new 2015 contribution limits for tax-deferred savings plans are higher; here's what you and your clients should know.
  8. Don’t waste your time wading through the slew of private and corporate tax websites out there. Go straight to the source: IRS.gov.
    Taxes

    The Most Helpful Tools On The IRS.gov Website

    Don’t waste your time wading through the slew of private and corporate tax websites out there. Go straight to the source: IRS.gov.
  9. Retirement

    Is a Registered Retirement Savings Plan (RRSP) taxable in the U.S.?

    Learn how the IRS treats Canadian Registered Retirement Savings Plans that are held by U.S. citizens or residents, and discover how to avoid double taxation.
  10. Personal Finance

    How and where is revenue recognized from barter transactions?

    Find out how the IRS requires companies that engage in barter transactions to recognize the revenue from such transactions and record journal entries.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center