Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Unfiled Prior year returns

Highlighted
Level 2

I had someone contact me about helping them.  They have NOT filed a tax return for at least 11 (eleven) years.  Where do I start?  Do I file all eleven years at one time?  Is all eleven required? 

I tried to research but conflicting answers and no definite answer.

Any advise would be very much appreciated.

Thank You!

Labels (1)
0 Cheers
9 Replies 9
Highlighted
Level 15

I would definitely look to seem if filing was required for all years. If they are self employed, I DEFINITELY would file all 11 years.  If otherwise required due to income (look at gross, not net)  I would start at the oldest and move forward. If there are stock sales, there may be losses to carryforward. The statute of limitations is 3 years, but the clock doesn't start clicking on that until the return is filed. If there is tax due, then it will be due with penalties. If there are refunds, only the last 3 are recoverable, the older ones are lost, but the years now start their 3 year window to be audited. Get some good money from them up front. 


ex-AllStar
Highlighted
Level 2

Thank you so much for your reply.

0 Cheers
Highlighted
Level 7

Retainer. Good luck! 🍀

On the other hand... four fingers, and a thumb.
Highlighted
Level 15

Yes start with a retainer.

Then get a Power of Attorney Form 2848.

Has IRS been sending notices?

If no,  call IRS and ask about the nonfiler situation. Don't give the client name. They may tell you they only want 6 years.


ex-AllStar
Highlighted
Level 2

Thank you!  There is lots to consider in this one. 

0 Cheers
Highlighted
Level 15

God didn't make little green apples
And it don't rain in Indianapolis


ex-AllStar
0 Cheers
Highlighted
Level 7

giphy

 

 

 

 

On the other hand... four fingers, and a thumb.
0 Cheers
Highlighted
Level 11

When all else fails, read the Internal Revenue Manual that IRS employees are required to follow.

Enforcement Period
  1. Policy Statement 5-133 (P-5-133), IRM 1.2.14.1.18, Delinquent returns—enforcement of filing requirements, discusses delinquent returns and the enforcement filing requirements. The enforcement period is not to be more than six years. However, the extent to which delinquency procedures will be enforced will depend upon the facts and circumstances of each case, and by reference to factors ensuring evenhanded administration of staffing and other Service resources. Enforcement for longer or shorter periods may be used when consideration has been given to:

    1. The taxpayer’s prior history of noncompliance.

    2. The existence of income from illegal sources.

    3. The effect upon voluntary compliance.

    4. The anticipated revenue in relation to the time and effort, required to determine tax due.

    5. Any special circumstances existing in the case of a particular taxpayer, class of taxpayer, or industry, or which may be peculiar to the class of tax involved.

    Management Approval
    1. Management approval is necessary if the enforcement activity is less than or exceeds the six-year period. Document the case file by:

      1. Outlining the facts of the case; and

      2. Detailing the reasons on Lead Sheet 130, Multi-year and Related Returns Lead Sheet, why enforcement for the longer or shorter period is recommended. (Deviating from P-5-133). If warranted, attach supporting workpapers.

       

    2. Group manager approval is not needed if the nonfiler voluntarily files returns beyond the established enforcement period.

 
Highlighted
Level 2

This is very good information.  Thank you very much!!

0 Cheers