If an individual has taxable income but doesn’t file a return, the IRS can prepare one under its “Substitute for Return” program. In one case, a man received $55,738 in retirement payments and $40 in interest one year but didn’t file a return or pay tax. The IRS prepared a return and informed him that his income resulted in a tax liability for the year. The man didn’t pay the bill. The U.S. Tax Court found he owed both the tax and a failure-to-pay penalty. Although the man claimed he wasn’t sure about his income’s taxability and wasn’t able to access certain information, the court found his statements “unsupported by evidence, irrelevant, or both.” (TC Memo 2023-46)
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