Transcript "Endless Loop"

[Jack from Ohio]

Client did not file her returns 2003 thru 2008. IRS created substitute return for 2003 in early 2008. Substitute return was created as MFS. Spouse filed his return as MFS. Client will benefit several thousand dollars by amending and filing jointly. Account transcript for 2003 shows that the return was "certified" in Aug 08.

Now the dilemma...

In order to amend, I need the return transcript showing the numbers the IRS used on their substitute return. IRS said the return was in the "archive" and was only available by filing 4506 and paying for copies because anything older than 2005 had been archived. I asked if the fact that it was created and transacted in 2008 made any difference, and was told that any return from 2005 or older was in the "archive" and would only be available by filing form 4506 and paying.

We created the form, client sent it with payment. 4 1/2 weeks later, the form came back with a letter saying that there was no return in the archive for 2003.

Any suggestions??

[Lion EA]

Does anything show up in e-Services? Do you have an IRS office close enough for client to go and ask for info? The line-by-line computer printout should be free. If you want the full copy with W-2's, etc., you have to pay. Did client get a copy when IRS notified him they filed a SFR? Can client get copies of his original tax documents, from employer, bank, broker, etc.?

[Pacun]

You do not need to amend. You need to file 1040 as you normally do but you need to send it to a special address.

[Jack from Ohio]

You do not need to amend. You need to file 1040 as you normally do but you need to send it to a special address.

Husband filed his 2003 return as MFS. Wife had the substitute form created by the IRS. In order to take advantage of the huge benefit of filing jointly, I will need to amend. Without the information from the substitute form, amend is not possible. Practitioner hotline could not find any information in the system concerning the 2003 substituted return except the final amount owed, and that the return had been "verified."

[mlinder42]

Why would you not amend the husband's return to MFJ this should eliminate the SFR completed by the IRS? You can not amend a SFR return because it is not a real return.

[Lion EA]

Exactly. You're amending his MFS to MFJ adding her information that she will have to provide you. She needs her original documents and info, not the SFR.

[Pacun]

You cannot amend a MFS to MFJ after the deadline. Is that correct or it is the other way around?

If this person didn't file in time, MFS should be the best anyways. Remember that if they lived together at any point during the tax year and if the spouse itemized, he can use the standard decduction, nothing wrong with that, except that his/her standard decduction will be 0 (zero or nada).

[mlinder42]

It is the other way around, You can not go MFJ TO MFS.

[kcjenkins]

Why would you not amend the husband's return to MFJ this should eliminate the SFR completed by the IRS? You can not amend a SFR return because it is not a real return.

This is correct. His return would be the one you are amending, to go to MFJ, and you simply add her correct info. The SFR should be totally ignored for this 1040X. Explanation would be something like "T/p filed MFS, and spouse did not file. Now amending to file jointly. All relevant forms are attached."

[Tax Prep by Deb]

But aren't we missing the time frame here? He filed his 2003 taxes and as I understood only has three years to amend. So aren't they to late to change filing status now?

Deb!

[kcjenkins]

You are right, that time factor is a problem. But it's not too late for her to file MFS, with her correct figures, and that will still trump the SFR, in most cases.

[Pacun]

No. You can amend any years but if they owe you a refund you cannot claim it if 3 years have passed. Do you think the IRS will reject the return if you amend your 2001 return and owe 6K?

[kcjenkins]

The thing is, if the SFR showed you owed $10K and the correctly prepared return shows you owe $6K, then you sure want to file that return, rather than pay an extra $4K just because the SFR did not include your legit deductions.

[Jack from Ohio]

Client did not file her returns 2003 thru 2008. IRS created substitute return for 2003 in early 2008. Substitute return was created as MFS. Spouse filed his return as MFS. Client will benefit several thousand dollars by amending and filing jointly. Account transcript for 2003 shows that the return was "certified" in Aug 08.

Now the dilemma...

In order to amend, I need the return transcript showing the numbers the IRS used on their substitute return. IRS said the return was in the "archive" and was only available by filing 4506 and paying for copies because anything older than 2005 had been archived. I asked if the fact that it was created and transacted in 2008 made any difference, and was told that any return from 2005 or older was in the "archive" and would only be available by filing form 4506 and paying.

We created the form, client sent it with payment. 4 1/2 weeks later, the form came back with a letter saying that there was no return in the archive for 2003.

Any suggestions??

My question was NOT about what to file, where, or when.

I need information from the IRS about the return that was created by the IRS. Two different hotline agents faxed the 2003 return transcript, and both times it came through blank.

Third call netted the information that it was "archived" and had to be purchased by client.

Then we got the letter mentioned above.

Any Ideas?

[Lynn EA USTCP in Louisiana]

My question was NOT about what to file, where, or when.

I need information from the IRS about the return that was created by the IRS. Two different hotline agents faxed the 2003 return transcript, and both times it came through blank.

Third call netted the information that it was "archived" and had to be purchased by client.

Then we got the letter mentioned above.

Any Ideas?

Request the wage and income information (which will report income via W2's, 1099's, SSA as well as mortgage interest via 1098's) and create a 'real' return. What the IRS has done is an SFR. The 'real' return, once filed will supercede the SFR.

Lynn Jacobs, EA, NP

Kenner, LA

[kcjenkins]

My question was NOT about what to file, where, or when.

I need information from the IRS about the return that was created by the IRS. Two different hotline agents faxed the 2003 return transcript, and both times it came through blank.

Third call netted the information that it was "archived" and had to be purchased by client.

Then we got the letter mentioned above.

Any Ideas?

I just don't see what it matters what is on the SFR. You are not amending that, you are filing the original return.

[Lion EA]

Get the original information from your client. Or, from e-Services if you have to. You need the actual information, not what the IRS might think happened, to file the original return.

[Pacun]

Imagine for a moment that the IRS never communicated with any of the taxpayers. So they came to your office to file because wife didn't file a return. After reviewing the information, you suggest that they should file jointly. Since husband already filed, you will need to amend his return from MFS to MFJ and add her income and deductions. Regardless of what documents they have, you should file form 4506-T for both taxpayers and you should file POA.

Now, let's go back to reality. Since you know that there is an SFR, you need to send your return to a special address. This special address is provided for forms that need reconsideration. You need to call IRS and ask them where you should file form 1040 if an SFR has been prepared by the IRS. When asking for the address, make sure you do not mention the fact that you are sending a 1040X because that will confuse the IRS agent. Remember that you are filing 1040X because you want to file jointly, otherwise you would be filing a plain 1040 form.

You mentioned that she didn't file 2003-2008. If there is a year when the MFJ benefits are not significant, you should just file a plain 1040 MFS for that year and send it to that special address if an SFR exist for that year.