October 23, 2019 at 9:43 pm #35927Tammy CoalsonParticipant
I have a new client that bookkeeping work will have to be completed before we are able to do his tax returns. He has not filed since about 1995. Some years, from transcripts, there is not much to file on, but others there are. It looks like from pulling transcripts, that IRS filed for him in 2002, 2001 and then wrote off as of 12/5/16 both years. In 2007, on the account transcript, it states a CP0059 was issued. But I do not have any more information besides that. All other years, the account transcript says, no return filed and $0 balance due. What years should we go back to and do I need to get a Voluntary Disclosure signed by him? What else am I going to need? He was self employed some in the US, but also in the UK and has filed returns there for a couple of these years, but at a loss from what he said to me. He has royalties that come in every year for the past few, since about 2014, after the his father passed and his father was a musician and composer. He is getting mileage records, receipts (as much as he may still have), bank statements and such together for me from 2013 forward. Advise please and Thank you so much. I have 2 more coming in with very similar background.October 24, 2019 at 11:38 am #35957Amy BrosnanParticipant
Typically to get into “compliance” means the last 3-6 years of returns. If there are other balances sometimes it is worthwhile to supercede an SFR; however, it sounds like his long passed anyway.October 25, 2019 at 6:47 am #36023James WadeParticipant
The IRS normally requires 6 years of back returns per the IRM. I would only do more if the IRS asks for it. Each state differs so you may need to check on that. Maine just follows the IRS rule of 6 years.
As for voluntary disclosure, Eric had a presentation on that not long ago. I think he said that the IRS no longer wants that if the client did not engage in bad behavior (tax evasion or income from illegal sources I think). I don’t remember if I heard this on a webinar or podcast. You might want to dig a little regarding voluntary disclosures.
Good luck, non-filers can be a load of work. Get paid first!
Jim WadeOctober 25, 2019 at 8:25 am #36031Eric GreenKeymaster
Tammy I agree with James: get a healthy retainer that covers all the tax prep plus some for the representation, and do the last 6 years 13-18. Also consider voluntary disclosure for any state returns that are past due. Also do not forget about the foreign forms and FBARs if he did biz in the UK.October 25, 2019 at 10:37 am #36040Tammy CoalsonParticipant
Thanks to all of you!! I really do appreciate the answers, structure and generous sharing of your knowledge. I have been preparing Federal 1040 taxes and assisting people with IRS letters for years. I am in TN, so I don’t have to deal too much with state returns, but sometimes I have things to come up that I have not come across and/or have not dealt with personally. I appreciate the fact that I can ask a question here and receive input from others and you don’t mind answering and sharing your wealth of knowledge. Again, THANK YOU!!!
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