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New Client Hasn't Filed in 8 Years


Yardley CPA

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A new client has not filed in 8 years.  Single, older female.  I will concentrate on this after April 15, but was hoping for some input on where to start?  I assume, for someone who has not filed for this long, you have to start at the earliest year not filed?  Are there other guidelines to follow?  If she does not have all the information she needs, what then?  

I'm not looking for anyone to spend a lot of time on this post, and certainly understand if answers flow in after 4/15, but wanted to throw it out there for your advice.  

Thanks!

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Start with 2014.  The statute on refunds runs on that one April 17th.  If they can get you all the info for that return, and there is a refund, you might be a hero.   Then call the IRS and ask them what years they want.   They may not have you file all the years, or they may want more years than the client is telling you about.   Regardless, you won't know until you call.   And if there is collection activity, you can probably get it put on hold while you start working on the other years.   I have found the PPL is pretty good about working with you when you are trying to bring a long-time non-filer into compliance.   

I have done a couple of these.  

Tom
Modesto, CA 

 

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I understand the argument for starting with 2014, but only if significant  refunds are due. and they are able to pay a fee surcharge in advance.

Otherwise my regular clients work that is already scheduled takes precedence.

If I am am putting it off until after tax season, then I am starting with the oldest year and working my way forward.

How else would you deal with any carry overs and carry forwards efficiently.

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On 3/21/2018 at 7:29 PM, cbslee said:

I understand the argument for starting with 2014, but only if significant  refunds are due. and they are able to pay a fee surcharge in advance.

Otherwise my regular clients work that is already scheduled takes precedence.

If I am am putting it off until after tax season, then I am starting with the oldest year and working my way forward.

How else would you deal with any carry overs and carry forwards efficiently.

I can't agree with this.  If you are too busy send them walking, but if you accept the client then you have to do right by them and if you lose them a 2014 refund they could have a claim against you.   I had one of these and we got the returned filed 1 day before statute ran out and it was a 90k NY refund.  

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I spoke to the client and asked her to gather all her 2014 information and I can at least look through and determine what needs to be prepared.  She responded by saying, "I had no income in 2014". She is disabled. 

With that said, I still asked her to pull whatever she had for 2014.

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On 3/21/2018 at 4:29 PM, cbslee said:

I understand the argument for starting with 2014, but only if significant  refunds are due. and they are able to pay a fee surcharge in advance.

Otherwise my regular clients work that is already scheduled takes precedence.

If I am am putting it off until after tax season, then I am starting with the oldest year and working my way forward.

How else would you deal with any carry overs and carry forwards efficiently.

If you do 2014, and then have a carryforward into that year, you amend and get another fee from the client.   This isn't the preparer's mess, it is the client's.  But, if you take them on, you need to preserve any potential refunds from an expiring year. 

Tom
Modesto, CA

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My procedure is to look back 20 years, not just the 8 that she claims are missing.  Although, the IRS only looks back 6 years, there may be prior years that she filed, or was SFR'd and owed tax, years that would be potential amendments.   

When calling PPL for a compliance check, my first question is - "Are there any taxes due and, if so, for what years"?   Then I request account transcripts for those years and also ask for their CSED dates.  My next question is - "What years is the IRS looking for?"  They will usually say the last six, but if there is no filing requirement, the number maybe less.

The final request is for the Wage & income transcripts for any missing years and for any years for which tax is due.  This may exceed the limit of 10 transcripts, so you  would have to make a second call, or use Eservices , or a service such as Canopy.

 

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