Most of the Offers to the IRS are that you only pay 9 cents to 17 cents on the dollar. The IRS looks at the taxpayer's current financial position and considers their ability to pay and their equity in assets. Based on these factors, an Offer amount is determined. Upon exceptance and payment, the Offer in Compromise gives you a fresh start. When completed all federal tax liens will be released.
Many taxpayers fail to file required tax returns for all types of reasons.
This criminal act if punishable by one year in jail for each year not filed. Needless to say, it's one thing to owe the IRS money but another thing to potentially lose your freedom for failure to file a tax return. SFR stands for Substitute For Return which essentially means that this the IRS' version of some unfiled tax return. SFR returns are filed in the best interest of the government which means that the only deductions you'l see are standard deductions and one personal exemption. You will not get credit for deductions which you may be entitled to including exemptions for spouses, children, interest on your home, taxes on your home, cost of any stock or real estate sales, business expenses, etc.