I know that back in the 80’s, my English friends were annoyed at the Aus practice of requiring Income Tax returns. They were used to an English practice where you didn’t have to do anything. (Or perhaps an parctice where you only had to sign a statement?)
At the time I found it pretty annoying too, because Aus was moving from a system where you filled out one side of a large piece of paper, to a new “easy” system that lead to an incredible massive boom in the number of comercial tax return preparation businesses.
So they sent you a letter saying how much you owed, but this wasn’t based on any previous filing you had done? (Even from a previous year?) IOW, they calculated your taxes for you out of the blue?
In Canada, most people with standard single jobs with the standard payroll deductions typically overpay. You can file a form at the beginning of the year specifying how much to deduct more or less (i.e “I have several dependants, take off $X less” or “This is a second job, take of $X more” - the latter I do with my pension which is a second income.)
They base it on your W2, 1099s etc. They might use previous info if they have it to determine if the status is single or married filing separately, but that’s it. It’s not out of the blue - they are using the information they have that was sent to them by your employer, banks, state lotteries. But since you didn’t file a return and tell them about any credits, deductions or dependents, there aren’t any of those on the substitute return. It’s not about whether you’ve filed in the past- it’s about whether they’ve been notified that you have taxable income. There will not be a substitute return without a W2, 1099 etc, even if a person has filed in the past- lots of people have taxable income in 2018 but not 2019.
They base it on your W2, 1099s etc. They might use previous info if they have it to determine if the statues is single or married filing separately, but that’s it. It’s not out of the blue - they are using the information they have that was sent to them by your employer, banks, state lotteries. But since you didn’t file a return and tell them about any credits, deductions or dependents, there aren’t any of those on the substitute return. It’s not about whether you’ve filed in the past- it’s about whether they’ve been notified that you have taxable income. There will not be a substitute return without W2, 1099 etc, even if a person has filed in the past- lots of people have taxable income in 2018 but not 2019.
Since you started with “mainly”: in Spain Hacienda actually does that unless you’ve told them to keep their paws off your filing. It was initially done only for yearly income tax, but has been extended to quarterly fillings for those of us who must do these (1). I don’t use “autofilling” as it’s called (2); my brothers both use it; my mother’s data includes one item that the government doesn’t get from other sources, so Littlebro adds it to the form she’s gotten and sends it back corrected.
Also, in Spain you’re only required to file if you make above a certain amount (note that this includes Hacienda doing your autofilling).
1: self-employed people, which due to a quirk of our laws includes every CEO, plus partners in any kind of professional firms, plus the trades… so it’s more people than one would think.
2: but when I go to Hacienda to file in person most of it consists of confirming the data the computer already has, I go in person because that way if the Nice Civil Servant has any questions they can ask them and we all avoid an audit. Not even Hacienda Auditors like Hacienda Audits. Also, since my uncle used to lead that particular department and two of the current Auditors for my region happen to be family, being audited is the kind of thing that really, really wouldn’t go well for me, if only because the family would nail me to a cross and keep me there till the end of time.
I don’t know why someone would do this. If you work for an employer, taxes are being withheld from your paycheck. The only way to get a refund of that is to file a tax return.
Not so much, since that wasnt why he was prosecuted *"Mr. Hairston then began purchasing literature published by, and attending tax seminars conducted by, Irwin Shiff, William J. Benson, Marvin L. Cooley, George Gordon, and others associated with the so-called “tax protest movement” who claim that the sixteenth amendment was never properly ratified and that filing tax returns is completely voluntary. He even attended some criminal trials of those charged with failure to file and visited acquaintances imprisoned on tax-related charges. See record, vol. 2, at 137, 168. On several occasions, he freely voiced his views that the tax laws were illegal and unconstitutional. See id. at 137, 161-67.
In the years 1977, 1978, 1979, and 1980, Mr. Hairston filed returns completed with only the words “object,” “self-incrimination,” or “none.” He filed no returns in 1981 and 1982. He received numerous registered letters from the Internal Revenue Service informing him of his obligation to file a return and the possibility of criminal liability for failure to comply. In the years 1980, 1981, and 1982, Mr. Hairston submitted thirty-one withholding certificates commonly known as “W-4s” on which he claimed to be exempt from withholding requirements.
Mr. Hairston’s defense at trial was that he did not file due to a bona fide misunderstanding as to his legal duty to file a return."*
His tax protestor statements and Illegal W-4 proved the 'willful" part of “Any person required under this title . . . to make a return . . . who willfully fails to . . . make such return . . . at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor. . . .”
If you simply dont file and are owed a refund, then there’s no ‘willfulness’.
There’s the added complication in the USA - here in Canada, all provinces rely on the federal government to collect their taxes too (except Quebec I think, they like to be different). Consequently, it’s one stop shopping for tax filing. As I understand, you have to file a separate return with the state down there, correct? So the problem is not just federal taxes, but state taxes too. Plus the fun situation of earning in one state and residing in another - I assume without a filing on your part to claim deductions for other taxes paid, everyone will want their full share? (Something Canadians don’t worry about) I guess the question is when does it become more profitable to pay a tax prep service than to leave the overpayment on the table?
Which could be why I said “assuming that you have taxable income”.
If you would like to not file just because you don’t feel like it, and be confident that a court would not construe that as “willful”, you’re a braver man than I.
Right, I know all that. They still can’t really say exactly how much you owe for the present year until they know the current filing status, number of dependents, whether you’re going to take the standard deduction, etc. The questions is: Do they send a letter saying, “You owe us exactly $2,3,44.00 so pay now,” or do they send a letter saying, “You haven’t filed, and we think you owe us, so file now.”
ETA: What I mean is, do you have to accept the calculation on the substitute return, or can you say, “But wait, we had a baby, so I want to claim a dependent . . .” or something like that. Is the substitute return now your official tax calculation?
They basically don’t care how much you actually owe for the current year- if you couldn’t be bothered to file, they will do it for you and they aren’t looking to save you a buck. First, they send you a lettersaying basically “Either file your tax return by (date) or pay us $2334 by (same date)” If you ignore that, you get another one, saying that you owe $2334, pay up or challenge the assessment in Tax Court. Even then, you can still file your own return- but may have to file it , pay the $2334 and wait for any refund. If you still do nothing, then they can take collection action against you.