Unfiled Tax Returns to 2010

[S T]

Preparing some delinquent not filed tax returns back to year 2010. Years 2010, 2011, 2012, and current 2013.

Year 2010 has balance due Federal, Year 2011 is -0-, Year 2012 has balance due Federal and Calif, Year 2013 has a refund on Federal and Calif.

Taxpayer would like the 2013 refund to be applied to prior years of 2010 and 2012, and then will make up the deficiency not covered by year 2013 refunds.

Best way to submit these returns? Years 2010, 2011, and 2012 will be paper filed for sure, 2013 is not on extension, but has refunds.

Should we paper file all years together including 2013 with a cover note, there are obviously penalties and interest that I am not calculating that both Federal and California will send later after processing.

Thanks

Sandy

[ATSMAN]

File paper returns and more than likely IRS will stop the 2013 refund and apply to prior year balance due. Had a similar situation with a unfiled 2012 return with balance due and 2013 with a small refund. Contrary to IRS instructions we sent both in the same envelope with a cover note. Taxpayer also asked for installment agreement.

[taxea]

There is no reason not to efile the 2012 and 2013. Wait until all have been input to the IRS computers (6 to 8 weeks or more) then you can see what the IRS did with the refund by asking for a records of account transcript. If the client doesn't care about interest accruing then the IRS will take any refunds and apply them to the other years automatically. If you have an F2848 you can make this request through E services.

[S T]

There is no reason not to efile the 2012 and 2013. Wait until all have been input to the IRS computers (6 to 8 weeks or more) then you can see what the IRS did with the refund by asking for a records of account transcript.

My past experience-- has been IRS will issue refund check when IRS should not - I do not believe this is an option that taxpayer wants to pursue - we want any refunds applied to past due returns that we are filing as soon as possible to clear the account, not having IRS chase down the Taxpayer for deficiencies.

I would have to paper file 2010 and 2011 - Error message for year 2012 on efile in my software, and I have not efiled a past due return through this process, so that appears to not be an option.

Best option is year 2013 to efile - however, taxpayer did not file an extension form, and this is the year there are refunds that need to be applied to prior years

Hoping that my thoughts will go well to submit all in one package with a cover note, and that has been explained to the taxpayer and the taxpayer seems to be in agreement with the approach to bring them current.

As far as e-services goes I am having difficulty since IRS "cut our wings" for available services. Am hoping IRS sees the error of their ways, and reinstates some of the services. POA is one of them.

Thanks

Sandy

[New York Enrolled Agent]

I would have to paper file 2010 and 2011 - Error message for year 2012 on efile in my software, and I have not efiled a past due return through this process, so that appears to not be an option.

For some reason, I thought you used Drake (I thought I saw posts on the Drake Board - Obviously, I could be wrong). If so, I just e-filed taxpayer 1040 forms for both 2011 and 2012 with large balance dues (federal returns). Both went through with no problem.

[Lion]

Check with your software. IRS allows efiling of current and two prior years. Many but not all states follow the federal. But the returns have to meet the MEF guidelines for each year, so an odd form could prevent an otherwise allowed year from efiling. And, your software might not support all three years or not support the states involved for all three years. Ask your software.

[taxea]

My past experience-- has been IRS will issue refund check when IRS should not - I do not believe this is an option that taxpayer wants to pursue - we want any refunds applied to past due returns that we are filing as soon as possible to clear the account, not having IRS chase down the Taxpayer for deficiencies.

I would have to paper file 2010 and 2011 - Error message for year 2012 on efile in my software, and I have not efiled a past due return through this process, so that appears to not be an option.

Best option is year 2013 to efile - however, taxpayer did not file an extension form, and this is the year there are refunds that need to be applied to prior years. there is no penalty assessed to refund returns that are filed within the 3 year period with or without an extension, has been my experience.

Hoping that my thoughts will go well to submit all in one package with a cover note, and that has been explained to the taxpayer and the taxpayer seems to be in agreement with the approach to bring them current.

As far as e-services goes I am having difficulty since IRS "cut our wings" for available services. Am hoping IRS sees the error of their ways, and reinstates some of the services. POA is one of them.

Thanks

Sandy

if you efile 2012 with a refund due they will take the funds for the prior returns. Call them and have them put a note on the file for each year explaining what you are doing. Do not file 2012 0r 13 until 10 and 11 are in the computers.

If you fax the poa you can check eservices after a week by inputting you CAF and client info in order to determine whether it has been input to your CAF file.

I know it takes longer now that the 72hrs we were used to and there is no other way to determine whether it has been put in your caf file.

[Possi]

Owes for 2011, 2012

We are filing paper returns for these 2 years, and I was not going to mail them together, per IRS, so my question is:

How do I handle the installment agreement request? Send one in with each return, or send one request in with "which" year?

[taxea]

Possi
I have the client start making a minimal monthly payment designated to the most current year while waiting for all the returns to be filed. When I have the total figure owed then I will submit an IA while working on an OIC. Be sure that the client designates year being paid on each check.

[Possi]

thanks

She is coming in shortly. I appreciate the word~

[mscash]

If there is an outstanding assessed balance the 2013 overpayment will be applied to it as of April 15, 2014. I would wait until the client gets a bill for 2010 then file 2013. If they file it sooner and get a refund check--not a direct deposit please--return the check uncashed.

[Burke]

The simplest approach to me would be to do as New York Enrolled Agent advised. E-file if possible the prior year returns with balances due. Earliest year first, get ACK, then the following year, etc. When both are in the system, efile the 2013 which has a refund. It will automatically hold and apply to previous years. If you are unable to efile prior years, mail in and wait for the letter asking for payment (or check to see if processed) before filing the refund return. ( I don't see how you can request an installment agreement until you know what the bottom line is going to be.) Then ask for an IA for the total amount less TP's payment, if he is going to make one.

[ATSMAN]

Unless the prior years are under audit or review, if you e-file prior year balance due return and a later year with a refund, the chance of getting a refund check are much higher. I have tried it this way and found that paper filing with a cover letter works better

[Possi]

no refunds

She still has to file 2009 which will most likely show a refund. I think she will lose that all together. I don't think they will even apply it to her balances.

After 2009, for some reason, she reduced her withholding, and she owes miserably for the following years. All the following years.

I had her send in all that she could afford, with the prior year returns. I sent a cover letter with ONE of those tax years, stating that she will do an installment request when we find out what the total damage is.

[Burke]

She still has to file 2009 which will most likely show a refund. I think she will lose that all together. I don't think they will even apply it to her balances.

You are right. No refund will be granted as the time for applying is long up. However, they will still want the return to be filed. Since it looks like all have been filed after that except for maybe 2013, I would wait for the letter about 2009.