Filing lots of OLD returns, except one

[AuditorTurnedGood]

All,
I am in the middle of preparing about 10 years worth of tax returns for a client. (Yes, I got the money up front). I have all the info needed back to 2000, the first year we need to file. But, there is a return already filed for 2005, which is problematic, since I have an S-corp that I think might have items rolling forward (depreciation, possible NOL on the 1040, etc)
So, since 2005 is closed to amendment, do I just do 00-04, then 06-08 as if 05 wasn't in consideration for having to run through any carryforwards?
Yes, it's a mess, and I have told the client to fully expect to be audited on every single one of these returns. But it's a good paying mess. Thanks!

ATG

[Nashville]

Refunds

I'm wondering why the client is considering filing this far back if he has been "under the radar" for this long. I realize our collective mindset is to be perfunctory with respect to filing requirements but in the real world I would have a hard time convincing a client to do this (let alone PAY me to do it).

In other words, has he escaped this long and can claim protection under the Statute of Limitations? Or has the IRS been on his butt for all these years by notifying him prior to the expiration of SOL?

Even if he files and has refunds, expect the IRS to disallow them under the SOL. And I don't even think he can "net out" these refunds against any amounts owed.

Refund "within" the SOL (I'm presuming for 2006, 2007, and 2008) would be allowed.

[BOB W]

All,
I am in the middle of preparing about 10 years worth of tax returns for a client. (Yes, I got the money up front). I have all the info needed back to 2000, the first year we need to file. But, there is a return already filed for 2005, which is problematic, since I have an S-corp that I think might have items rolling forward (depreciation, possible NOL on the 1040, etc)
So, since 2005 is closed to amendment, do I just do 00-04, then 06-08 as if 05 wasn't in consideration for having to run through any carryforwards?
Yes, it's a mess, and I have told the client to fully expect to be audited on every single one of these returns. But it's a good paying mess. Thanks!

ATG

Funny you should bring this up. I have to do 1120 (foreign owner) for 2002-2009. But no inside return was filed.

Lots of penalties here with NYS and possible IRS for 2008. I don't at this point think there will be any profits, but the Corp is going to be filing a final return. The corp has almost $300,000 in it. Some as Loans and some as Retained Earnings & Capita Contributionsl.

I will have to file a 1040NR for the liquidating distributions and report as "connected to business activity" so the client won't get a flat tax of 30%.

Any other issues that I need to look at????

[ChEAr$]

A 1040X for 2005 may indeed be filed. It may be too old for a refund, but any return may
be amended.

[AuditorTurnedGood]

In other words, has he escaped this long and can claim protection under the Statute of Limitations? Or has the IRS been on his butt for all these years by notifying him prior to the expiration of SOL?

The Statute of Limitations only starts once the tax return is filed. Since the returns have never been filed, the statute never started, so it can never expire. The IRS and state have been on him off and on for years to get the returns done, just finally got in gear on it.

In some cases, SFRs have been filed, and he needs to file his returns to replace the SFRs, as the liability on them is substantially higher than it actually should have been.

ATG

[AuditorTurnedGood]

Thanks for the head up on 2005 - I doubt there will be a refund, since he's never paid a dime in.

ATG