Announcement

Collapse
No announcement yet.

Back Tax Return Filing

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    Back Tax Return Filing

    I have a customer that came to me last Thursday about filing tax years 2003 to 2007. I told him I would have to do a 8821 and get the transcripts for the IRS for the previous years since he has no information. He is wanting to file for 2007.

    My question is would it be best to wait and do all the returns at once? This is what I usually do. He is wanting me to go ahead and do 2007 return. I feel like if I wait or don't wait any refund he gets will be applied towards the other years. I know he will probably owe because there are some 1099-Misc hanging out there. I think he is wanting to get 2007 done to get the stimulus rebate. I don't know but that may also be applied towards past tax years.

    Kind of tired and hope that made a little sense. I would appreciate any comments.
    Thank you
    Tags: None
    #2
    Prior Years

    The stimulus rebate will definitely be applied to any tax debt that he owes, as well as any refund he may have for 2007.

    That's the general procedure.

    But it won't happen that way if he files 2007 first. The IRS can't apply a refund to a debt that they don't know about.

    I'm certainly not recommending this, but the fact is that if you file 2007 electronically, he may well get the 2007 refund and the rebate before the IRS completes the processing of any of the previous years.

    He won't be violating the law, or any regs, by filing the returns out of order. Once he's late, he's late.

    Maybe you should let him file 2007 and get the rebate so YOU can get paid LOL
    Burton M. Koss
    koss@usakoss.net

    ____________________________________
    The map is not the territory...
    and the instruction book is not the process.

    Comment

      #3
      True on getting paid. He has already paid me half.

      Thank you Burton I wasn't sure on how it would work out. I thought since there are 1099-Misc for a couple of years they might just grab the refund. Worth a try on filing on 2007. If he gets it he gets it if not he knows why.

      Thanks
      Dany

      Comment

        #4
        Software and prior years...

        With my software, ProSeries, I cannot transfer clients data (name, SS, DOB etc.) backwards, only forward. If that is the case with your software, you may want to start with the lowest number tax year and enter the min client data, then transfer to the next tax year, etc. till you are in 2007. You can save some time this way.

        Comment

          #5
          Amended Return Possible

          I'm not talking against filing 2007 first, but keep in mind that this may cause you to need to file an amended return for 2007. You mentioned him having 1099s, so just reading between the lines (which I should not do) it is probably a schedule c return. This could mean that depreciable assets were added in the years unfiled that would have an impact on the 2007 return.

          Just a thought. If this is not the case, then in the words of the comedian Emily Latella "Never Mind". :-)

          LT
          Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".

          Comment

            #6
            I would get any transcripts first. If there is 1099's from prior years the IRS may be assessing tax on years that returns were not filed.

            If so, there should be no hurry in filing 2007 until the prior years are ready as well and if he has expenses to reduce his income the IRS does not know this and is over assessing the tax due.
            http://www.viagrabelgiquefr.com/

            Comment

              #7
              Prior year balance due will hold up refunds

              If the IRS has reason to believe that there is tax owed on the prior years, they will not issue the refunds/stimulus payments until those returns are filed. I have had that happen often with non-filers. In that case, filing the '07 first won't get him refunds, he'll get a letter that the prior years must be filed before any refund is issued.
              "A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain

              Comment

                #8
                I had this happen last year

                I had one last year who filed his 2006 MFJ return showing a refund. He came in a few weeks later with a letter from IRS saying they were holding his refund pending the filing of his 2004 return. He was single in 2004 and there were a couple of 1099's issued to him - he just never had gotten around to doing anything about it.

                Needless to say, his new wife wasn't too thrilled about this development. Anyhow, we filed his 2004 return and within a few weeks the 2006 refund was released. And I guess they are still together.

                Anyhow, filing the 2007 return and stimulus payment may breeze through, or it may not.
                But what's the harm in trying? He has nothing to lose by filing the 2007 & then waiting to see what happens next.
                "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

                Comment

                  #9
                  I would rather do them all at once. It would be much better. I really do think the IRS will hold the refund up and told him so. Especially with 1099-MISC. I don't think he will have any equipment to deduct. He said he did not and did not have the receipts to prove it even if he did. I thought I may have time to get all the returns done by April 15th but I won't. Its crazy people waiting until the last minute. It gets worse every year. I talked to this fellow back in Oct 07 and he is just now coming to get them prepared.

                  Thank you all that responded.

                  Comment

                    #10
                    Not interested

                    He is not really interested in getting 2002-2006 filed, or he would have done so. If you file 2007, he will think he is off the hook. And if IRS sends him a refund or a stimulus, then he really is. He will not engage you to do any further work in history if this happens.

                    From prior years, he could have anything from a NOL to a CG loss rolling forward, although his options and refunds may be somewhat restricted because of non-filing or late filing.

                    Comment

                      #11
                      If you are an EA, use 2848 instead of 8821, it will allow you to get more information and to help the client if he goes into collections. I always put 20 years on the form suchas "1988 through 2008." You never know what years will show up.

                      In any event, request transcripts of "Wage and Income" and his "Account Transcripts" for those years. You can find out over the phone what has been assessed for each year, if any.
                      If any unfiled returns have gone to SFR, you will need to get the address of where to send those.

                      I haven't checked, but does some one get the stimulus payment with unfiled returns? I would think not.

                      Comment

                        #12
                        Nashville you might be correct. I just called him. He is wanting me to find out about prior year returns before filing 2007. Wants it done before 15th.

                        I am not a EA so I have faxed in a 8821. I am going to try and request the information on eservices. I am not sure if he will get the rebate or not.

                        I hate to put alot of time into it and then nothing come of it. Even though I have half down.

                        Comment

                        Previous template Next

                        Disclaimer

                        Collapse

                        This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

                        Working...
                        X