I didn't file my taxes in 2010. Now the IRS has filed them for me, and my tax bill is much bigger than it would have been if I had filed the return myself. What can I do?

Not a whole lot, unfortunately. You have just been whammied by the IRS' dreaded "substitute for return," a little-known loophole which allows the IRS to fill out your tax return for you if you neglect to file it yourself for any given year.

The government accomplishes this by scouting out your sources of income—salary, interest, payments from clients, etc.—then having a tax examiner enter those numbers into a 1040. Since the aim is to punish you for “forgetting” to file your taxes, you can forget about claiming any of your usual deductions, and your tax bill will be much higher than if you had bitten the bullet and filled out the 1040 yourself.

There is one slim chance for salvation, though. If you can prove that you failed to file your taxes because of extenuating circumstances—the death of a family member, a serious illness, etc.—then your tax attorney may be able to submit an "audit reconsideration" request.

Usually, this is only an option for taxpayers who have filed a return and received a government audit. If they feel the IRS has been too harsh in its assessment of the proper deductions and write-offs, they can ask the feds to take a second look. The problem is, since you failed to file your return in the first place, you're behind the government 8-ball, and you'll have a tough time convincing an IRS revenue agent that you deserve a lighter tax bill.

A substitute for return is not something to be taken lightly—and by the time you receive one, it may already be too late to undo the damage. If you have questions, call the Oklahoma tax professionals at Travis W. Watkins, PC (800-721-7054) for a free consultation today!