Jim, I think you need to prepare the last 6 years of returns (12-17) which is what the IRM calls for to be in compliance. The issue here is that he cannot explain what became of his money. Do the 433-A analysis with him and see what it shows as additional future income available. The past is unlikely to be an issue simply because his inability to show expenses for the business will probably cover that,a nd there is an argument the returns may be overstating his taxable income because of it. The bigger issue is getting comfortable with doing the financial and the resolution. he needs to get a bank account and clean up his act or you need to pass. In my humble opinion.