Non deductible and no 8606?

[Possi]

Hey, my client has made non deductible contributions for the last 3 years and there has never been an 8606 done..

In 2010, he converted the traditional IRA to a ROTH.

Can I reduce the taxable amount by the non deductible total without the 8606s having been filed in the past?

arggggg

I have 23 returns in the drop off hole and this is putting a jinx on my rhythm....

[erchess]

I don't think so

My understanding is that the Forms 8606 have to be filed and accepted in order for the client to have basis in a traditional IRA. My further understanding is that although they sometimes DO ACCEPT late filed ones, they don't have to. Years ago the big box firm I worked for had me prepare 8606s for the relevant prior years and file attached to the current year's paper return and tell the client to hope for the best. I lost touch with the situation after that because any subsequent activity with that taxpayer would have been none of my business unless the taxpayer specifically asked for my involvement. The plan was that unless the IRS in the mean time raised a protest, when the time came the taxpayer would claim his basis and see what happened. Your case is of course different because had they been filed the 8606s would all be in the IRS Computers. My client was a relatively young guy and the possibility of a Roth Conversion would not exist for at least twelve years and his retirement would be at least that far away so there was plenty of time for the matter to be out of the institutional memory of both our firm and the IRS.

Personally what I would do unless someone can convince me otherwise is prepare and mail in the old forms with a cover letter making whatever excuses are applicable and file the current year return electronically with an 8606 as it would be if the old ones had been timely filed and tell the client to keep his fingers crossed. I think I would prepare a specific engagement letter for this case specifying that you had no liability if the IRS did come back on him.

[Possi]

Thanks!

I appreciate the response and will do!!!
~d