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You can always request a waiver of penalties. I don't think IRS can waive interest though. You will need to talk to the client and get the circumstances. I usually compose the letter, but it is addressed to IRS from the client. And the client signs and mails. When IRS opens their efiling system, you can efile current year and two prior years. The earlier years will have to be paper filed.

Even though first time penalty abatement may be only for the first year, try to lump the years together and claim that it is the first time. This worked for me (one of my clients) several years ago. The IRS originally only abated the first year but after a second letter (which I composed) they abated the penalties for all years. It is worth a try.

The older (pre-2022) returns will have to be mailed, yes. However the client will be able to pay online using Direct Pay (or send a check for payment of tax with the mailed-in return(s)) thereby at least cutting off additional penalties and interest. First Time Penalty Abatement may be possible for the oldest year (if the requirements are met; those are available online), but the penalties have to be imposed first. You can't ask for abatement before they add in penalties. Other penalty abatement might be possible if your client has a super-strong reason she could not file for those years. Sole caretaker of someone who needs 24/7 care might be a reason. Being someone who had a serious health event and was in hospital and/or rehab for a long time (or recurring visits in close proximity - I got penalty abatements for two years for one client who was in the hospital weekly for chemo, for months, spent the rest of the week recovering from that, then back in) is another reason. But they do check those out carefully and you do need to send in substantiation. Again, only after they impose penalties.

Get paid up front plus an extra retainer to deal with the penalties etc. Once they get the bills from IRS, your payments go on the back burner.

when efiling opens in January 2025 the 2022 2023 and 2024 returns may be efiled. All older years must be paper/mailed.

https://www.irs.gov/payments/administrative-penalty-relief

Any cloud storage that you might use would be subject to the FTC law requiring MFA.

I have a long time client, one of my favorite and most profitable, who had an issue on the 2022 tax return. I prepared the return in Feb 2023 but the IRS sent the client a larger refund in Mar 2023 than I calculated. I went over the return and could not find anything that was improperly entered. I told the client that the IRS would send a letter of explanation for the change and please let me see a copy of it because I wanted to know what they changed and how I missed it. In June of 2023 I followed up, no letter. Last year when we did the 2023 return I followed up, no letter from the IRS. Today, I got a note from the client that he got an IRS notice for the 2022 return acknowledging they made a mistake and would he please pay them back for their error. 2 takeaways from this for me: 1 - I was right which makes me feel better & 2 - the IRS makes mistakes, even in the e-file environment. The clients still need us. Tom Longview, TX

Indeed, the IRS is human operated and thus imperfect. Despite many in my business saying it cannot happen, it is absolutely true things get lost, and mistakes made. Their system read one of my Q3 941's as being for Q2 and ADDED it to Q2. So I got an underpay for Q2, and for Q3. The "experts" say the IRS rejects and 941 after the first, which I can say is not always the case. There was one year where a significant number of my customers at one 941 processing centers reported the IRS had no record of their returns. Clearly, there was a data loss, which was later also shared by industry insiders to me.

I've used Foxit Phantom for about 15 years to create pdf's. It can also create new, or existing fillable forms. It's fairly easy if there is an existing form, but if you start from scratch it can take up a lot of time. It has a loto of other features, not quite as much as Adobe, but it has served me well over the years.

Customer who is a tax prep franchisee asked me for something because they are tired of answering repeated employee questions. The chuckle is the employees, who are likely doing tax prep, are not retaining their own pay stubs! I can only figure it is a case of the franchisee being in a position to have to take on all who can fog a mirror and operate the software. I hear similar situations often (having to take on less than ideal employees), because the business cannot work if they were to pay enough wage to get competent workers (usually it is a case of a long-time employer not wanting to raise prices to cover the current cost of employees). We sometimes see similar threads here - keeping prices current.

Interesting article on MFA or 2FA....again a reminder that a holistic approach is needed. I just wish the rules passed down would recognize this. https://www.darkreading.com/cyberattacks-data-breaches/researchers-crack-microsoft-azure-mfa-hour