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Old Tax Returns


Edsel

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I have been presented with a wonderful golden opportunity to file tax returns for a physician from 2011-2018.  Anyone else chomping at the bit to do this?  For some reason, I seem to get asked once a year for backfiling such as this.  Sometimes I have been able to help - sometimes it is useless.  Often I get told they had an accountant who has been fired - more often than not it is the former accountant who has "fired" them.

Specific questions:  How far back are IRS records available?  and what is the best procedure to order them?

A little more interesting information:  High income physician purchased a farm and claimed $1500 in revenue in 2010.  Claimed a $275,000 loss on his tax return.  He told me this provoked an audit and almost all of this loss was disallowed.  Imagine that!!

Thanks in advance - Ron J.

 

 

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I have a client that I hear from about every 3 or 4 years.    I charge a steep amount and payment up front as I prepare each year.   You can get transcripts for current year and then 3 years back..  I understand you can call their automated number or file the 4506 form for the prior years.

If you take this client on be good to yourself (pricing)  and don't let client slow you down.  If he's 8 years behind he's a grand procrastinator so get ready for some tough love.

 

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8 hours ago, Edsel said:

I have been presented with a wonderful golden opportunity to file tax returns for a physician from 2011-2018.  

Specific questions:  How far back are IRS records available?  and what is the best procedure to order them?

 

I always start with the IRS letters.   There should be some.   Figure out how aggressive they are in the collections process.   From that information, you will get an idea of what years the IRS is looking at.   Then call the IRS and let them know the guy is coming clean and will be filing his returns.   Ask them which years they want.   

One time, IRS asked for 7 years, knowing that the taxpayer had lower income and withholding during most of the years.  They did not seem to care about the other 4 years.   Another time the client was a tax protester, and they wanted every single year, all 10 of them, as they were actively collecting on all of them.   In both cases, they stopped collections and gave me time to prepare the returns.   

PPS can be your friend on this.   Use them.

Tom
Modesto, CA

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The availability of IRS transcripts,  depends on the type of transcripts requested.

Wage & Income transcripts, which are the items reported by 3rd parties, W-2's, 1099's, etc, are available for 10 years.  (There is no state info on these, such as state withholding tax)

Account transcripts, which report the the balance due, penalties, payments, interest are available for at least ten years, and indefinnitely if there is any balance due.

Return transcripts are only available for the last 3 years.  This would include late filed returns that were filed in the last 3 years.

Record of Account - combines the Account Transcript with the Return Transcript, but, again, is only available for the last 3 years.

The IRS has a lookback period of 6 years, with a cutoff at the end of May each year.  So, the returns that they would require now are 2013-2018.  Next May 2014 will fall off.  I have had clients that wanted to file returns older than 6 years, but the IRS will not accept them and will mail them back.

 

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On ‎7‎/‎31‎/‎2019 at 8:54 AM, Roberts said:

I hate it when high income people show up at my office wanting to pay me to work. As a small business owner it's sort of a nightmare scenario to be paid.

I just had a neighbor that my former partner let go after preparing the 2009 return come to me because his kid needed 2017 filed for higher education purposes:  I know I'm a mess, the EA who's been doing my return is mean, will you please help me? 

Yes, as a matter of fact, it's July, and I like to eat, wear clothes, and live indoors.  Let's see if we can regroup.  LOL.  It went very well.   A lot of times it works out. 

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On 7/31/2019 at 11:27 AM, Max W said:

The IRS has a lookback period of 6 years, with a cutoff at the end of May each year.  So, the returns that they would require now are 2013-2018.  Next May 2014 will fall off.  I have had clients that wanted to file returns older than 6 years, but the IRS will not accept them and will mail them back.

 

Max are you saying this client will not be able to file 2011 & 2012?

As you know, the IRS prepares substitute returns, which consist of all the revenue they can find and don't allow ANY expenses.  The tax liability for a medical doctor with $2MM in gross receipts would be absurd.  Can he do nothing about 2011 and 2012?

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3 hours ago, Edsel said:

Max are you saying this client will not be able to file 2011 & 2012?

As you know, the IRS prepares substitute returns, which consist of all the revenue they can find and don't allow ANY expenses.  The tax liability for a medical doctor with $2MM in gross receipts would be absurd.  Can he do nothing about 2011 and 2012?

I did not say that SFR returns could not be amended, because you did not mention them.  It seemed as if you were talking about unfiled years. So, if 2011, 2012 were SFR'd,   they can be amended as is any year that has a balance due, no matter how far back.    However

BTW, I have noticed a loophole in the treatment of unfiled returns.  I do not think I have ever encountered a SFR if an extension had been filed for that year, even if subsequently the return never got filed.

I think we are going to be seeing far fewer SFR's. In 2017, the ASFR unit was scaled back to shift more resources to the Refund Hold program.  TIGTA was not in agreement with that decision.  

https://www.treasury.gov/tigta/press/press_tigta-2017-27.htm

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