Procrastinating Taxpayer

[peggysioux]

Have a new client who hasn't filed tax returns since 2002. IRS and Franchise Tax Board have sent him several letters. He finally got paperwork together for his returns to be completed. I completed his returns, but he had an NOL for 2005 so I also did amended returns for 2003 and 2004 for the two-year carryback of the NOL. I submitted the amended returns alongs with the 2003, 2004, and 2005 tax returns that were being sent to the IRS office handing his deliquent account. The IRS and Franchise Tax Board have attached his checking account for 2004 and gave him until 8/30 to submit his 2003 and 2005 tax returns. My question is this - do I also need to send the amended returns separately to the normal IRS address or will it be sufficient to send to the office handling his deliquent account? Also, do you think the IRS will accept the amended 2003 tax return being three years have passed? I have not dealt with the IRS previously regarding clients who have not filed past the three year mark. The 2003 tax return that I did was far more advantageous than the tax liability the IRS came up with on the proposed assessment. Does anyone have any idea of how the IRS handles when the three years has passed, but IRS is asking for his tax return. Do they have the ability to decline his submitted 2003 tax return per their discretion? Any input appreciated.

[Bees Knees]

My question is this - do I also need to send the amended returns separately to the normal IRS address or will it be sufficient to send to the office handling his deliquent account?

IRS has always told me in the past to mail all returns and amended returns directly to the person handling the case. Since everything is tied together and NOLs affect multiple years, all you will do is confuse the system if you try to send an amended return to the normal address when the original return may not even show up in the system yet.

Also, do you think the IRS will accept the amended 2003 tax return being three years have passed?

TTB, page 15-4 says: “If a claim for refund relates to an overpayment attributable to an NOL carryback, the period for filing for a refund ends three years after the due date (including extensions) for the taxable year of the NOL.”

That means if the NOL occurred in 2005, the due date for filing for a claim for refund on any NOL attributed to 2005 is April 15, 2009 (assuming there was no valid extension for 2005 since you are now late filing the return). It does not matter that the 2005 NOL is carried back to 2003 and that 2003 is a dead year. A 2005 NOL will open up 2003 for the NOL carryback only.