To File or Not to File: Best Course for a Near-Centenarian?

[DBinSV]

I just learned that my elderly father (going on 97) has not filed returns for 2015, 2016 and 2017.

He has a monthly pension of approximately $5,000 and several hundred monthly in Social Security. Together, those two constitute the full extent of his income. His only material asset is approximately $50,000 in a savings account.

I could arrange to have an accountant do my father’s returns but my concern is that his obligation, including penalties and interest, may come close to wiping out his savings. In 2014, the last year for which he filed returns, he paid approximately $6,300 in federal income taxes and owed nothing to the state (IL).

As yet, the IRS has apparently not contacted him regarding his nonfiling for the years 2015 and 2016.

My sister and I are trying to figure out what the best course of action for my father would be, under the circumstances. For his age, he is in reasonably good health, though actuarially of course, his remaining years are very limited in number. We seek to tap into the collective wisdom here for insight.

[taxea]

Do you have a PTIN? No? Then you are on the wrong site

[TAXNJ]

PTIN required if COMPENSATED for preparing return.

5. If I don't have a PTIN, can I still prepare tax returns for compensation? (revised 10/10/13)
No. You must have a PTIN to prepare tax returns for compensation.*

See #5

https://www.irs.gov/tax-professionals/frequently-asked-questions-do-i-need-a-ptin

You might consider "pro bono" services offered for seniors in the local area. Based on limited info in your scenario the returns need to be filed. Also, if eligible, there are payment plans that maybe available for possible tax liability.

[Burke]

Both of the items of income mentioned in the post have been reported to the IRS. It is only a matter of time before he receives a CP2000 and he may have already done so (if he does not live with a member of the family.) 2015 was due April 2016, or with extension, October 2016. It takes about 12-18 months to determine a non-filer should have filed. If he is not having withholding from his pension, he should definitely start. And returns should be filed asap. You may be able to get some penalties waived due to the circumstances and his age, but not the taxes. The obligation is not going away, even if he dies. A simple return with the items you describe can be done by VITA or AARP services for free. Assuming they file past years.

[JohnH]

All great advice. And the most productive thing to do right now is prepare and file the 2017 return. Unless you filed an extension, the Failure to File penalty is only 5% right now, but it increases another 5% on May 15, continuing to go up at 5% per month until it maxes out at 25%. The remaining penalty & interest for not paying is slightly under 1% per month, so you want to deal with the Failure to File penalty for the 2017 year as soon as possible.

[TAXNJ]

Do you have a PTIN? No? Then you are on the wrong site

Is that a new requirement that one needs a PTIN to post on this site? Cannot find that requirement! Where did you find that?

[Uncle Sam]

I believe the objection was to answer questions of NON tax professionals who come here expecting to receive off the cuff (free) advice, when the objective of this board is supposed to be inter-tax professional help.

[JohnH]

I generally agree with the policy, and I don't usually respond to individuals looking for tax advice. However, this was one of those cases I felt it worthwhile to comment on. Apparently some others did as well. The exceptions are what make the rules meaningful.

[Lion]

Do I remember correctly that this site requires the ownership of a current The Tax Book to join this site? That would limit many non-professional tax preparers from entry.

[Rapid Robert]

I believe the objection was to answer questions of NON tax professionals who come here expecting to receive off the cuff (free) advice, when the objective of this board is supposed to be inter-tax professional help.

Yes, it was very obvious what was meant. "PTIN" was being used loosely as a proxy for being a tax professional.

As the sponsor of this forums has published on their main web site,

"Do you have questions about a client's tax return? Use our Message Board to ask a fellow tax preparer. The Message Board is exclusive to our customers and not available to the general public. "

I have reported the original post to the forum moderator. Hopefully this thread won't be deleted, but will be left here as a reminder about what the guidelines are.

[Rapid Robert]

"I just learned that my elderly father (going on 97) has not filed returns for 2015, 2016 and 2017."

"I could arrange to have an accountant do my father’s returns but my concern is that his obligation, including penalties and interest, may come close to wiping out his savings. In 2014, the last year for which he filed returns, he paid approximately $6,300 in federal income taxes and owed nothing to the state (IL)."

"My sister and I are trying to figure out what the best course of action for my father would be, under the circumstances. For his age, he is in reasonably good health, though actuarially of course, his remaining years are very limited in number. We seek to tap into the collective wisdom here for insight. "


So your elderly father, for years, hasn't been filing returns and paying taxes when due (also known as breaking the law), and all you are concerned about is that by paying his fair share, it may "wipe out his savings". So? What's it to you? Are the honest taxpayers responsible for subsidizing your future inheritance?

In case you didn't know, there are no "circumstances", such as age or having significant wealth, that exclude one from the income tax system.

Why isn't your father addressing this issue himself? If your father is not competent to handle his affairs any longer (and if he previously met his legal obligations but suddenly stopped doing so, that's evidence), then a proper guardian or conservator should be assigned to handle his affairs, with court supervision to ensure that the law is being followed, something you don't seem very concerned about.

[TAXNJ]

I believe the objection was to answer questions of NON tax professionals who come here expecting to receive off the cuff (free) advice, when the objective of this board is supposed to be inter-tax professional help.

One must be a "customer" of TheTaxBook to post if reading the registration correctly. Think that can be a college student, “NON” tax preparers, Tax return preparers with professional credentials, (e.g., CPA, EA, Tax Attorney) and Tax return preparers without professional credentials. Have not found a TheTaxBook requirement to the contrary.

So, if the Original Poster is a customer of TheTaxBook, they should get the same respect as other posters, otherwise, one does not have to respond to the post if they think the Original Poster is not a “tax professional” according to their definition (whatever they think that means).

[Uncle Sam]

So TaxNJ - what's your point?

[TAXNJ]

DbinSV Poster

Welcome to the web-site.

Some additional info from IRS when selecting tax preparers :

Some info from the IRS web-site

Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. Tax professionals have differing levels of skills, education and expertise.

An important difference in the types of practitioners is “representation rights.”......

As the IRS suggests "Always inquire about their education and training."

IRS has a:
DIRECTORY OF FEDERAL TAX RETURN PREPARERS WITH CREDENTIALS AND SELECT QUALIFICATIONS. ..... (see link below)

Also,
"PTIN Holders - Tax return preparers who have an active preparer tax identification number, but no professional credentials and do not participate in the Annual Filing Season Program, are authorized to prepare tax returns. Beginning January 1, 2016, this is the only authority they have. They have no authority to represent clients before the IRS (except regarding returns they prepared and filed December 31, 2015, and prior).”

DIRECTORY OF FEDERAL TAX RETURN PREPARERS WITH CREDENTIALS AND SELECT QUALIFICATIONS: To help taxpayers determine return preparer credentials and qualifications, the IRS has a public directorycontaining certain tax professionals. The searchable, sortable database includes the name, city, state, and zip code of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries with valid PTINs for 2016, as well as Annual Filing Season Program Record of Completion recipients...."

https://www.irs.gov/tax-professional...qualifications

[Rapid Robert]

I prepared my own taxes for decades, and never heard of TheTaxBook until I became a tax pro. I'd wager that well over 99.999 percent of the self-preparers have never heard of the TheTaxBook. So for a self-preparer to suddenly register here would be highly unusual, although I agree not outside the realm of possibility.

Now, one scenario that occurs to me, is that someone who teaches tax classes to lay people or tax-pros-in-training, might occasionally be tempted to refer one of their student's questions to a forum such as this, as a learning exercise for the student. If that happened, it would be OK with me(*), but I would expect two things, first that the student nature of the question be disclosed, and second that ethics require the poster to always assume the taxpayer is going to comply with the tax law, and not to enable or encourage a taxpayer to fail to fulfill their legal tax obligations.

I don't see any evidence in the original post of either thing, so I assume they don't fit the student scenario, but that's just my assumption, no facts to back it up.

(*) I am not a moderator of sponsor of the forum, just a participant