How to fix 2018 taxes after IRS filed a substitute return with incorrect information

So I'm really hoping someone can help me with this mess I'm in. Back in 2018, things were really chaotic in my life (dealing with health issues and a cross-country move), and I completely dropped the ball on filing my taxes. Fast forward to today, and I just discovered the IRS filed a substitute return for me for 2018, and now they're saying I owe them around $27k! Looking at what they filed, I'm completely shocked - they have my income listed as $99,565.00 and marked me as "married filing separately." This is completely wrong! I only made about $25k that year from my small agriculture business, and I was definitely single. My ex and I had split up years before that. I've finally gathered all my documentation from that year - bank statements, receipts, my business records. I know I had some farm equipment depreciation (about $2,500) and some minor stock losses (around $500). Should I try to handle this amended return myself, or am I better off hiring a tax professional? I'm used to filing my Schedule F and business expenses as a small farm owner, but this seems like a different beast. I've never had to correct something the IRS got this wrong. Also, I know this will probably have to be done on paper rather than electronically. Any advice would be extremely appreciated - and please, only constructive suggestions!

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18 comments

Ava Harris

•8M

This is actually a pretty common situation, and you definitely need to file an amended return. When the IRS creates a substitute return, they use information they have (like 1099s, W-2s) but without any deductions or credits you might qualify for. They also might have incorrect information about your filing status. What you need to file is Form 1040X (Amended U.S. Individual Income Tax Return) for 2018, along with the correct Schedule F for your farm income, Schedule D for your capital losses, and any other forms relevant to your situation. Since there's such a big discrepancy between what they reported ($99K) and your actual income ($25K), you definitely want to include all documentation that proves your income - bank statements, receipts, invoices, etc. Given the size of the discrepancy and the fact that it's from 2018, I would seriously consider hiring a tax professional who specializes in IRS problems. The fee would be worth it to make sure everything gets resolved properly, especially with almost $27K on the line.

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Ava Harris

•8M

Generally, you have 3 years from the original due date of the return to file an amendment to claim a refund. However, when the IRS has filed a substitute return for you and is assessing additional tax, you can still file a correct return even beyond that window - you just might not be able to claim a refund if one would be due. In your specific situation, you're disputing their assessment rather than claiming a refund, so you should definitely proceed with filing the correct return regardless of the time that has passed. The most important thing is getting documentation together that proves your actual income and filing status for 2018.

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Emily Thompson

•8M

I went through almost the exact same thing but for 2019! The IRS somehow thought I made $84k when I actually made about $30k. What saved me was using taxr.ai to help me organize all my old documents. I was a complete mess trying to find all my papers from years ago, and their system helped me figure out exactly what forms I needed and what info was missing. I just uploaded what documents I could find to https://taxr.ai and it helped me figure out what was wrong with the IRS substitute return. It even helped me put together the packet of information I needed to send to the IRS to get it corrected. Basically guided me through the whole 1040X process without having to pay an accountant thousands of dollars.

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Emily Thompson

•8M

It helps you identify what forms you need and what information should go on them based on your documentation. It's sort of like having a tax pro look over your shoulder, but you're doing the work. You upload your documents (even partial ones), and it extracts the relevant tax information and tells you what's missing or inconsistent. Yes, I did get my issue resolved! The IRS accepted my amended return with all the documentation I provided. It took about 4 months to get the final resolution letter, but they did cancel about $19,000 in incorrect tax assessment. The key was having everything organized properly and supporting evidence for every number on my forms.

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Sophie Hernandez

•8M

Just wanted to update that I actually tried taxr.ai after my skeptical comment above, and I'm really glad I did. I had a different tax issue but also from a prior year (2017) where I needed to prove some business expenses the IRS was questioning. The document analysis was surprisingly thorough - it found deductions in my bank statements I hadn't even considered. I was able to put together a complete response to the IRS with supporting documentation for everything. Got a letter last week that they accepted my documentation and reduced what I owed by over $8,000. It was definitely worth the time to upload all my documents. The system even flagged inconsistencies I hadn't noticed between some of my receipts and what I had originally reported.

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Daniela Rossi

•8M

If you're still getting nowhere with the IRS after filing the amended return, try Claimyr to get through to a real person at the IRS. I spent WEEKS trying to call the IRS about a similar substitute return issue, and could never get through - just stuck on hold forever until disconnected. I found https://claimyr.com and watched their demo (https://youtu.be/_kiP6q8DX5c) and decided to try it. They basically wait on hold for you and then call you when they have an IRS agent on the line. I finally got to speak with someone who could actually look at my file and help me understand what documentation I needed to submit.

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Daniela Rossi

•8M

They don't talk to the IRS for you - they just handle the hold time. The system calls you when they have an agent on the line, and then you talk directly to the IRS agent yourself. So you're not paying someone to have a conversation with the IRS on your behalf, you're just paying to avoid the 2+ hour hold times. The service doesn't interact with the IRS at all beyond waiting on hold. Once you get the call back that an agent is on the line, it's just you and the IRS agent talking - they verify your identity directly with you just like a normal call. Basically you're just outsourcing the hold time.

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Zoe Walker

•8M

I owe everyone an apology, especially Profile 5. I was completely wrong about Claimyr being a scam. After my skeptical comment, I decided to try it myself since I had an ongoing issue with a tax lien that I couldn't get resolved. I was shocked when I actually got a call back with an IRS agent on the line. Spoke directly to someone who helped me resolve my issue in about 20 minutes. After spending literally months trying to get through on my own, this was life-changing. I was able to set up a payment plan and stop the collection process that was about to start. I've never been happier to be wrong about something. If you're stuck in IRS hell, definitely worth trying.

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Elijah Brown

•8M

I'm a former small farm owner who went through something similar. For the Schedule F part of your return, make sure you have records of ALL your expenses - feed, seed, equipment maintenance, fuel, etc. The IRS tends to scrutinize farm losses, so having detailed records is key. Also, don't forget to look at your depreciation schedule for that equipment. If you've been depreciating farm equipment, you need to account for that properly on the amended return. That $2,500 in depreciation you mentioned could make a significant difference.

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Elijah Brown

•8M

Make sure you have mileage records if you used a vehicle for farm purposes, and documentation for any home office space if you claimed that. Also, if you received any agricultural subsidies or payments from government programs, have those documents ready as well. One more thing - if you had any crop insurance proceeds or disaster payments in 2018, those need to be properly reported. The IRS often cross-references those payments, and discrepancies can trigger further review of your amended return.

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