Unfiled Trust Returns

[erchess]

Client has I think eight or ten unfiled years of trust returns. Most recent year is '97. Most years there were two due but then one terminated and the other terminated a year later. No the terminal returns were not filed. When I say terminated I mean the assets were distributed to the beneficiaries who are not my clients. Taxpayers owe enough to hurt but not so much OIC based on inability to pay comes into play, at least not unless P and I are sufficient to bring it in which is possible.

Is there anything to be said for not filing the trust returns? I am thinking it is better to file them but maybe the fact nothing has been said already means nothing will be. The main thing on my mind is that the clock never stops ticking on unfiled returns.

[Burke]

The back trust tax returns should be filed. The problem is going to arise if any trust taxes are due. Who was the trustee? That will be a personal liability of him/her and a negligence on his/her part. He may be able to collect from the benes, maybe not. Hopefully, that will be the case. And he will have to bear the cost of filing the returns as well if the funds cannot be retrieved.