Client hasn't file tax return for many years

[tonia2021]

I have a client that hasn't filed for many years (not since 1997). I was told by one tax prepared that they should prepare the last 6 years - and not all 10. I think we can find all of the information to file all 10. Does anyone have any info on this, or has anyone else dealt with this type of problem?

[Bird Legs]

Prior years returns

The first preparer is correct. I would not go back further than 6 yrs.

[DTS]

1040

Bird,

We all run into this situation, occassionally. I am curious about only filing the last 6 years, so I'll know the next time it happens.

Why is this?

Thanks,
Dennis

[DaveO]

I was told by a Revenue Agent

That the IRS can only compel you to file the current year plus 6 prior years. However if subsitute returns were filed by the service the only way to correct them is to file.

Besides, isn't it kinda fun filing those old returns, a trip down memory lane and all?

[Holland]

I have a client that hasn't filed for many years (not since 1997). I was told by one tax prepared that they should prepare the last 6 years - and not all 10. I think we can find all of the information to file all 10. Does anyone have any info on this, or has anyone else dealt with this type of problem?

I strongly urge you to get all your fees up-front before starting any work for this client.

Christopher Mewhort, EA, CGA

[taxmandan]

I agree with filing just the last 6 years for now and wait to see if theIRS requests any earlier years. They can demand them but seldom do so. However, our state has been sending out letters demanding returns going back 14 years, so be aware you may need to do them all for the state.

[sea-tax]

While I see the point of only filing the last 6 I would be inclined to prepare all years for which I have information on . Then let the client decide which he/she chooses to file. Ultimately it is their choice.

[New York Enrolled Agent]

From the Internal Revenue Manual:

4.12.1.3 (05-03-1999)
Enforcement Period
Policy Statement P–5–133 in the former IRM 1218 Policy discusses Delinquent Returns and the enforcement of 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:

The taxpayer’s prior history of noncompliance

The existence of income from illegal sources

The effect upon voluntary compliance

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

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.[end]

Managerial approval is required in order to look beyond the 6 year period.