Filing past years returns

[C Walker]

A client just contacted me about filing his tax returns from tax year 2004 to present.  My assumption is since he hasn't filed and IRS has not sent him any correspondence that he probably had refunds due him.

I'm thinking E-file currently whats available to e-file and wait for IRS response for past returns.

Thoughts?

Thanks

[CMSERVICE]

hi can file from 2017, 2018, 2019 and 2020 after april 15,2021 he can only file 2018, 2019, 2020.

[sjrcpa]

@CMSERVICE  That's efiling.

Refunds for 2014-2016 are lost.

All prior year returns can be filed. 2014 - 2017 on paper. What's client's reason for not filing and for coming forward now?

Get a large retainer.

EDIT: Just reread and saw you said 2004, not 2014. Go to irs.gov and look up nonfiler. Generally IRS only wants 6 years returns filed to get the taxpayer back into the good graces of the system.

[George4Tacks]

A relative just contacted me regarding non filing with IRS breathing down their neck for 2005, 6 and 7. I plan on doing an amended 2005, 6 and 7 for this self employed, paranoid, stupidm not really related to me (or at least soon to be disowned) relative in hopes of possibly reducing the amount and maybe even getting a refund of some of the levy and garnishment money. I will file for all the subsequent years just to be sure. I had reloaded 2005, 6 and 7 that I had deleted recently. Interestingly the 2005 only had one client on it. It was my attempt to reconstruct a NY tax return that was leaked for a notable figure. 

[Skylane]

@George4Tacks Did relative file the returns or were they forced? If forced, IRS would have been pretty punitive... 1099 income with no expenses; sometimes MFS and plenty of P&I. IRS can provide wage and income statements for 10 years but it’s a good starting point. I assume there’s a revenue agent involved. They’ll work with you if give them a reasonable timeline.

[Tucsonpremium]

You can go back 10 years since that is the status of limitations he will have to pay if it is any thing due but will not get any refunds before 2017.

[George4Tacks]

@Skylane  File tax returns? With 1099 income? Why would you want to do that? You would owe money if you did that!!!

I know I have heard that many times over the years. I just didn't expect it to come from a relative that close, but that is why family doesn't discuss taxes. 

I will be very reasonable, at least with IRS. Not my first rodeo, but the first with someone I have known most of my life. I may not be so reasonable with the "taxpayer." 

Thanks for the input. 

[Skylane]

@George4Tacks  “ I will be very reasonable, at least with IRS“

 I’ve probably had a dozen of these over the years... They’re all good people who had a problem that they were afraid to address at the time because they didn’t have resources or something.... so they ignored it. When nasty  IRS letters start coming in it just scared them more.... so they ignore it some more... One of my favorite “deadbeats” once said, “l was hiding in plain sight” until a revenue agent taped a letter to his door.  At the end of the day, the $120k tax debt was reduced to about $15k by filling the returns. It was mostly P&I and was manageable. The TPs sense of relief was always a lot more than my fees. 

[sjrcpa]

The statute of limitations never starts if you don't file.

10 years is the statute of limitations for collection after assessment has been made.

[BobKamman]

I don't believe IRS would be breathing down anyone's neck for a 2005 return.  Was the IRS also breathing down their neck to go to WalMart and buy iTunes gift cards? Or maybe it wa a typo, what they really want is 2015.  It rained, the note smudged, the 1 turned into a zero.  

Has the relative seen any notice or correspondence from IRS?  Have the name of the revenue officer or, more likely, contact person at the ACS toll-free site?  No?  I didn't think so.  

Are you even sure this is an income-tax case?

Before going back more than six years, get a Form 2848 and ask to see where a manager has approved going back beyond that.

4.23.12.9 (12-16-2008)

Retroactive Enforcement

1. The extent to which enforcement of delinquency procedures will be undertaken will depend upon the facts of each case. As a general rule, enforcement should not extend beyond six prior years. But enforcement for shorter or longer periods, or not at all, may be determined where such action appears to be in the best interest of the Government from the standpoint of reasonableness, salutary effect on compliance, and prudent deployment of resources. (See IRM 1.2.14.1.18, Policy Statement 5-133.)

2. Specific factors that should be taken into account include:

   1. Degree of flagrancy

   2. Special need to enforce compliance in a specific area

   3. Whether the delinquency involves trust fund monies collected but not paid over

   4. Special circumstances peculiar to a specific taxpayer, class, industry or type of tax

   5. Expenditure of resources required in relation to anticipated results in terms of revenue, provided there are no other overriding considerations

   6. Period of enforcement used by other IRS activities in return-compliance programs in the same tax area

3. Delinquency procedures will generally be enforced if a taxpayer has failed to file a one-time return. In other cases when contact is made with a delinquent taxpayer, delinquency procedures should ordinarily be followed through for at least one period. However, the circumstances of each individual case must be taken into consideration. (Refusal-to-file cases referred to Examination or TE/GE after taxpayer contact has been made by examiners are required to be fully documented prior to such referral.)

4. If it is determined that enforcement should extend beyond a six-year period, the examiner will document the case file by outlining the facts of the case and the reasons why enforcement for the longer period is recommended. Such recommendations must receive managerial approval prior to enforcement.

5. If it is determined that delinquency procedures need not be enforced for the full period of the delinquency if less than six years, the case file must fully document justification for the shorter period. Such determination must receive managerial approval prior to enforcement except in cases where there would be no net tax due for the years for which delinquency procedures are not to be enforced.