Filing Prior Year Returns

[jackie310]

I have a client who is filing tax returns for 2020,2021,2022,2023. The first 2 years show a refund due to failure to receive stimulus payment. Although it's too late to receive the 2020 refund, the 2021 refund will cover the past due amounts from 2022 and 2023. My question is:  Would it be better to just mail all 4 years together or mail the 2020-21 and wait for filing to reopen and e-file 2022 and 2023? 

Thanks for your advice.

[Strongsilence-CPA]

Mail 2020 and 2021 now then e-file 2022 and 2023.

[ljr · Accepted solution]

Never mail anything as a bunch - there is too much of a chance of one or more of them being overlooked. If you mail send them each individually and I would send certified/return receipt, so I know when the arrived.

If you send 2021 in before 22 and 23 there is a good chance that they will just issue a refund check - if you want 21 to cover 22/23 then they have to be processed first so the IRS will "hold" or "pull" the 21 refund to cover. maybe. possibly

I think you need to think of each year as stand-alone - I would mail 2020 & 2021 now and then when efile opens late January efile 22 & 23. I would have client make the payments due and then just get the refund back. I would not count on the refund, what if you find out that somehow they did get stimulus checks already. 

[BobKamman]

I would mail the 2022 and 2023 now, then wait a couple weeks before mailing the 2021.  Otherwise the 2021 refund might be issued (although I think IRS freezes a lot of refunds for past-due years, when later returns have not been filed).   It's true that you don't know a 2021 refund will be issued, or that tax is not owed for earlier years.  But it's also true that the 2021 refund might be frozen for many months, while 2022 and 2023 notices demand immediate payment.  Bottom line is that your client is violating the law, and it's not your job to tell him how long he can ignore it. 

Of course, we're all assuming that the government won't close down Saturday.  If that happens, I would still want my returns at the front of the line when IRS reopens.  

[BobKamman]

And how did you verify that the client did not receive the stimulus payments?  I've heard that story before, from people who threw out the debit card thinking it was junk mail.  

[IRonMaN]

Stimulus payments?  Oh, you mean those things that clients were adamant about never receiving but when they popped open their bank accounts they had mysterious deposits exactly equal to the amounts that they were entitled to receive?

[Just-Lisa-Now-]

I had 2 people come in with letters this summer, telling them they never activated the debit card, we were able to call in and get them reissued.

[BobKamman]

This changes everything (?).

The Internal Revenue Service will issue automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The IRS announced the special step Friday after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment.

[sjrcpa]

I thought that if you filed a return and didn't claim it and were eligible, that IRS would have adjusted that return and sent it to you already. Guess they missed some?

[George4Tacks]

 @jackie310 I just heard on the news those missing recovery rebate checks are almost in the mail.

IRS Announcement

Most eligible taxpayers already claimed the credit

Most taxpayers eligible for EIPs have already received their EIP or Recovery Rebate Credit.

These December payments for the 2021 Recovery Rebate Credit are only going to taxpayers where IRS data demonstrates a taxpayer qualifies for the credit. Qualified taxpayers are those who filed a 2021 tax return, but where the data field for the Recovery Rebate Credit was left blank or was filled out as $0 when the taxpayer was actually eligible for the credit.

[Just-Lisa-Now-]

Not sure if theyre sending checks or only doing DD, I saw in another group several clients had gotten mystery DDs for 1400/2800