New Client

[Janitor Bob]

Can he still get refund for 2005 (assuming there is one?) or is it too late? I cannot remember how many years you have to claim refund....Isn't it three years from original due date of return? If so, I think he is out of luck if there is a 2005 refund.

[Gail in Virginia]

You remember rightly - he is too late on 2005 for refund, but it is never too late for them to collect if he owes.

[JohnH]

It's also possible that the unfiled 2005 return may cause them to hold up any refund he might be due for 2006-2009 years. I had someone year before last who got married and the joint return evidently caused the system to search for unfiled returns. The IRS sent a letter saying one of the spouses had a delinquent return and they would not issue the refund until they received the return. It was a closed year for refunds, but the SOL was open for assessment because of the non-filing.

As it turned out, not much money was involved for the unfiled return. But there were some very interesting & lively discussions between the two since it was holding up a $3K plus refund.

[jainen]

>>Can he still get refund for 2005<<

In my opinion the statute of limitations has run on claims with an original 2005 federal return, unless he had reasonable cause such as a medical problem. But he may have until April 2010 for the state. I suppose it's possible he sent some money in for 2005 within the last two years, perhaps in response to an IRS letter, and that would be still available for refund.

[kcjenkins]

And the important thing to remind him is that until he does file, it's an open year for the IRS, so filing is still worth doing, just to close it. And, of course, it's HIS FAULT, NOT YOURS, that he lost the refund, if in fact there was a refund. And 2006 will soon be too late, also.

[ILLMAS]

How much are you going to charge him for all those returns?

[kcjenkins]

By all means, do one year at a time, and get paid for that one before you spend your time, your most valuable resource this time of year, on any more. Sometimes those people who put off filing for 3 or more years put off paying for the work they get just as long, or longer.

[Pacun]

For previous years, I charge 33% more than what I charge regularly.

[Tax Prep by Deb]

For previous years, I charge 33% more than what I charge regularly.

I know I do things backwards, but I actually cut them a deal. I emphasize the importance of resolving this issue, and I will help in anyway I can. Everyone I have done this for has come back year after year knowing they have someone on their side. I usually get good referrals too! I do however emphasize that this is special pricing just for them, and then I tell them what my usual fee would be.

Most of these that I have done are very simple in nature and usually are not during the busy tax season. It's usually towards the end of the year when IRS starts sending notices and starts the levying process.

Just my thought! I do appreciate however KC's comment about getting paid for each year and doing one at a time. If I'm going to get stiffed I want it to be before I put out the work!

Deb!

[JohnH]

I know I do things backwards, but I actually cut them a deal. I emphasize the importance of resolving this issue, and I will help in anyway I can. Everyone I have done this for has come back year after year knowing they have someone on their side. I usually get good referrals too! I do however emphasize that this is special pricing just for them, and then I tell them what my usual fee would be.

Most of these that I have done are very simple in nature and usually are not during the busy tax season. It's usually towards the end of the year when IRS starts sending notices and starts the levying process.

Just my thought! I do appreciate however KC's comment about getting paid for each year and doing one at a time. If I'm going to get stiffed I want it to be before I put out the work!

Deb!

Deb: I like your approach. Every situation has to be decided based on the circumstances. Like Pacun, there are times when I charged the max and then added a PITA fee because I was pretty sure they would be gone once the problem was resolved. But in other situations, giving them a break at the outset creates a loyal client and long-term profitable relationship, along with referrrals. It all boils down to what our intuition tells us about the client and then following those instincts. In any case, it's always a good idea to get progress payments when multiple years are involved.

[joanmcq]

I always get a retainer up front to do multiple back years, especially if we are trying to get in under the wire for a refund. One of two times ever I've been stiffed for work was for additional fees that were over and above the retainer I charged. And that one was getting levied under an SFR that was filed. :angry:

[baystorm]

Over the last few years I have been getting more referrals, etc from individuals who have not filed past tax returns. I currently have a client who has not filed since 2000. I always get a retainer up front and makes sure that I have an engagement letter with the client. If the client owes the IRS money and the client is going to want you to negotiate with the IRS, then the retainer is even larger. However, I no longer accept their original source docs unless they have also given me a retainer. I have some client(s) who dropped off a box of records - they never dropped off a check so I never even started their tax return. But their original source documents are taking up space in my office and can't find or locate them to pick up the records yet I do not want to shred them.