Prior year refunds and amounts due balance?

[ritastone001]

New client hasn't filed taxes for 10 years. Single, W-2s only. No dependents. Have explained no refunds for anything before 2017 will be issued.  Question is would any refunds and or amounts due for those years be "balanced" out?  Example  2011 refund 100 and 2012 due 100 would the IRS balance it to 0?  Also is it still required to mail each year individually or do a packet with all returns?

[IRonMaN]

The IRS isn't into balancing acts so don't plan on them offsetting those years.  

I don't know why you couldn't send them all in one bundle.  But I have a fear of a very dedicated IRS employee grabbing the one on top and ignoring all of the other years so I would tend to mail them individually.  But that's just me and my paranoia dealing with the IRS.  It could just be all of those anvils talking.

[dkh]

I'm in agreement with @IRonMaN   - don't think IRS will apply one year overpayment to another underpayment.    As for mailing all in one packet - if it were me -  I'd put each year in a separate envelope in one large mailing envelope.  That would ensure whomever opens the packet will realize there a several years to process.

[ritastone001]

I was afraid the balancing act might not work but a few years ago..well maybe 15-20 years ago, I did something like this and did a balance sheet and included it on the top of the packet with all returns. They never were billed for anything. And received refunds for the applicable years.  I marked on the outside of the envelope something like "multiple returns". If there is nothing against trying it, I may do this again just to see how it goes.   I do appreciate your answer my question. Opinions help me to consider options I may not have thought of.

[ritastone001]

I like your idea of each year in a seperate envelope. But one mailing. Thank you! 

[JeremyNJ]

Probably 10 or 12 years ago I had to do the same thing.  I found that mailing multiple things in one envelope resulted in only the top one being processed and everything else ignored.  I tried applying refunds to the subsequent years and there were mixed results, so I would give it a try.  I did one-time have a return where the individual have moved out of the US and was not a citizen, so would not have had a filing requirement if he didn't have US income.  He got a W-2 in a later year for some stock vesting but never filed a return.  Probably 4 years down the road he received an IRS notice and came to me to resolve.  I assisted him with filing the return and he was due a refund of close to $100k, but told him not to hold his breath.  Even assuming he had an automatic extension for being outside the US, he was too late.  The refund was initially disallowed and I did a little bit of follow-up with the IRS which was also denied, but then a refund appeared out of nowhere.  I always though he should have given me a little extra thank$, but I got just an ataboy out of it.  Point is, it doesn't hurt to try.

[PATAX]

@JeremyNJ 👍 real generous individual there...

[PATAX]

@ritastone001 what the others said is Sound Advice... Also make sure you get paid in full, if he or she has not filed taxes in 10 years what does that generally tell you... Just my opinion..

[ritastone001]

Oh I gave him my fee up front. And explained only returns paid for would then be printed to file.

[BobKamman]

Mailed in the same envelope, likely to be stapled together and only the first one processed.  Might help to fold them separately, but might not. 

I wouldn't waste my time going back before 2017.  (Maybe 2016 if state statute runs longer.)  IRS might not waste their time sending bills for those years.

[ritastone001]

I had thought of that. Anything beyond the 3 yr time frame I may do a quick figure by hand to let the client decide what he wants to do. No need to open a can of worms if no one has been fishing.