NONFILER for 13 years! What to Do?

[taxjungle]

Hello, I have a new client that is coming in today. He wants to start college to become a Probation Officer. He hasn't filed taxes in 13 Years! He didn't say anything about receiving any letters from IRS or state.

How many years back should I file for him?, that is, IF I decide to do them after I interview him today. A long-time client is bring him in.

What would you do?......Please advise! Thank you.

[RitaB]

Today

What would you do?

Today, I would run, not walk, from this client.

In June, I might have a sit down and hear his story. If I decided to take the job, I'd do every year. Comforting to know he aspires to be in law enforcement.

[MAMalody]

I would do only a basic interview to see if I could/would tackle this client. If the answer is yes, I would do only the basic work to do an extension and have him come back in late April or June. Like RitaB, I would do all outstanding years.

[taxea]

If I decided to take this on I would get a retainer that would cover the tax prep fees for the 13 years before I did any work. Then I would get a POA covering the 13 years (you can only put 10 years on one poa). Then I would call the hotline and get the income and accounting for the 13 years to be sure I included all income reported to the IRS when preparing the returns.

Lastly I would do the 2008 and 2011 then tell the client the remainder of the returns would be done after the rush of the tax season.

You also want to alert the IRS that you have been retained to bring this client into compliance so he doesn't start getting computer generated letters telling him he has not filed certain years.

[DMICPA]

Old Returns

I had a client that was an airline pilot. He had thousands of dollars taken out of his paycheck and He had not filed for something like 8 years. Never received any notices from the IRS and state.

First thing I had Him do was have an attorney to represent Him if needed.

I prepared the past due returns.

Attorney contacted the IRS and presented the past due returns

He had large refunds due but, due to the statute of limitations, he could not get any refunds past a certain number of years. He was out of luck on those refunds.

[New York Enrolled Agent]

Hello, I have a new client that is coming in today. He wants to start college to become a Probation Officer. He hasn't filed taxes in 13 Years! He didn't say anything about receiving any letters from IRS or state.

How many years back should I file for him?, that is, IF I decide to do them after I interview him today. A long-time client is bring him in.

What would you do?......Please advise! Thank you.

To answer your question - file six years.

This is the policy of the IRS - enforcement beyond six years requires managerial approval. You can find this in the IRM - Policy Statement 5-133.

File the six years - get the taxpayer into the system and get him moving forward.

[FEDUKE404]

Run run run

Today, I would run, not walk, from this client.

In June, I might have a sit down and hear his story. If I decided to take the job, I'd do every year. Comforting to know he aspires to be in law enforcement.

I tend to agree - I bet his background check might be quite revealing.

As for the tax work, I would let this guy find some other tax person and consider instead doing something like spending the summer hanging vinyl siding - especially since I now know I could avoid the SE tax on same.

FE

[RitaB]

Vinyl

As for the tax work, I would let this guy find some other tax person and consider instead doing something like spending the summer hanging vinyl siding - especially since I now know I could avoid the SE tax on same.

FE

I need a two foot piece of white vinyl siding. A piece fell off my house, and the dog has chewed it up. Then, I need someone to bury this dog.

[Roberts]

To answer your question - file six years.

File the six years - get the taxpayer into the system and get him moving forward.

That's what I've done for clients. If you file the last 6 years, the IRS isn't going to go after the older stuff. Let's face it, the IRS knows he hasn't filed and has determined it isn't in their financial interest to audit him. They aren't going back further if you voluntarily get him up to date without an IRS letter demanding action.

Give him an estimate of what you would charge and tell him you'll start on it when you have the time. Get a retainer up front for all 6 years if you don't trust him.

I had a new client walk in about 5 years ago and wanted to get caught up. The really shocking part - he'd been making estimated tax payments all those year. We filed the returns, applied his refund to the next year and when we finished, he had a $10,000 refund coming to him. He was really old, died about 2 months after we finished up filing his last return. His widow was a little shocked to get that $10,000 check in the mail.