Coming in from the cold

[erchess]

New client wants to get back in compliance after being sick and not filing for the last ten years. Spouse filed MFS all those years but is open to my amending to MFJ with her if that will lower their total tax increase caused by making her compliant. He will be paying the tax anyway in all probability unless they decide to sell and can sell a certain piece of real property for enough to pay it off. Oh and they are the first non-filer I have ever dealt with whose records are in good order. There seems to be nothing missing including basis information for stock sales. Now for my questions.

Will the IRS want us to go back all the way to 2000 or is it worthwhile asking for a free pass on the earliest four or more years? I can use the money of course for doing all of them but at the same time I feel that my obligation to pursue their best interests requires me to get them out of filing any given return if I am able to do so within the rules. Part of me says the IRS has not written to them so it may be best not to rattle their cage.

Should I start with 2010 or with the earliest year?

Should I file the returns as I complete them or should I wait until all are done? Given the rest of my workload I could do all ten returns comfortably in three weeks without working more hours than I want to.

[WhiteOleander]

I have a client that hasn't file for years also. My first step is going to be to call the IRS and ask them what they want filed.

[ChEAr$]

Six years worth should do it.

[dyne]

I simply refuse to prepare delinquent tax returns. Period. Makes life much easier and
I do not want these types of clients.

[ToledoEd]

Any unfiled returns are open and the IRS will want to see a return. Any refund more than 3 years old will be lost, but tax due will be collected. Old refunds may be used to offset tax due. I have had to file 10 years of returns for clients 4 times. It is a pain to do, especially trying to remember the old rules for earlier years. It helps if you have the TaxBook and the like for all of the years you need. I am not sure you can change the filing status for the first 6 years as one return was filed and accepted. 2007 to present are open to ammendment until April 15.

[Possi]

I like it...

I simply refuse to prepare delinquent tax returns. Period. Makes life much easier and
I do not want these types of clients.

I am so spoiled by good clients after pricing the bottom feeders out, that I don't even "fix stupid" anymore... (tax returns I didn't do to begin with.) Of course, if I size one up to be teachable and keepable, I'll fix that! =)

[DaveO]

Everyone of the multiyear non-filers I've done has had to file all unfiled years. Latest one had a letter from the IRS asking for 1999 thru 2009. Someday I might have the luxury of turning that sort of work down but not yet. I draw the line at those who don't want to get legal and come in spouting tax protestor nonsense along with those who have acted in flagrant disregard of the rules. Most of the non-filers have become good clients and a source of good referrals as well.

[erchess]

Cites

First, thank you to all who posted to this thread. Now for those who believe that sometimes you don't have to go back and file all open years, can anyone give me an authority even a limited one such as an IRS Pub? My own story is that the last time I had a non filer he was told he could get by with six years but I don't know but what the reason was that he had a return on file for the seventh year or the IRS had no record of income for that year. What I remember clearly was that the IRS employee said the guy had slipped through the cracks because their computer showed he had been required to file but did not show that anything at all had been done about it.

[ToledoEd]

Another thing to remember is that you can have client request the IRS transcripts for each year showing all 1099's and W-2's that the IRS has record of. That will give you a solid starting point for all of the years.