Arnie,
Does the 3115 come into play here, then? Could I take the depreciation not taken if I use that form?
Donna Donna L. Loeffler, CPA 936 Church Avenue St. Charles, MN 55972 (507) 251-8119 dllcpa@hbci.com The information in this message, and any files transmitted with it, is confidential, may be legally privileged, and intended only for the use of the individual(s) named above. Be aware that the use of any confidential or personal information may be restricted by state and federal privacy laws. If you are not the intended recipient, do not further disseminate this message. If this message was received in error, please notify the sender and delete it. IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
Arnold M. Socol wrote:
Donna,You can back in to the allowed or allowable depreciation. You need the date in service and the basis, then you can go back and run a depreciation schedule from the first year forward.Arnie----- Original Message -----From: Donna L Loeffler CPASent: 10/01/2008 4:27 PMSubject: Re: [taxchat] Hasn't filed a tax return since 1999
I really appreciate your thoughtful responses to all of my questions.
He will appreciate that I don't have to file those earlier years. As far as an engagement letter goes, I get engagement letters from all of my clients. I have already gotten a retainer from him, but we haven't agreed on prices yet. I'm thinking I'm going to charge him by the month--that way, he will hurry up and get me everything I need. He tends to give me stuff piece-meal.
I just called the IRS. I have to submit a 4506T to get the tax return. The unfortunate thing is that she said they probably don't have it as far back as 1998. He didn't file in 1999, according to her. It is pretty hard to find a starting point. If he only had personal property depreciating, I wouldn't worry about it, but that real property should have a lot of depreciation left.
Donna Donna L. Loeffler, CPA 936 Church Avenue St. Charles, MN 55972 (507) 251-8119 dllcpa@hbci.com The information in this message, and any files transmitted with it, is confidential, may be legally privileged, and intended only for the use of the individual(s) named above. Be aware that the use of any confidential or personal information may be restricted by state and federal privacy laws. If you are not the intended recipient, do not further disseminate this message. If this message was received in error, please notify the sender and delete it. IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
John Stevens, Equi-Tax wrote:Donna,
IRS Policy 5-133 says that the IRS only wants the past 6 years for a nonfiler, so I would file 2002-2007. The adjusted basis on the real estate will include depreciation “allowed or allowable”, so the basis should be adjusted even for the missing years. One thing you could do, however, is file Form 3115 for 2002 and claim the depreciation that was missed on the 2002 return. Keep in mind that Policy 5-133 is just a policy that IRS follows. It’s not law, and they can change it. One of the reasons for the 6 year aspect of it is that, until recently, wage and income information has been available online (easily retrieved by IRS employees) for only the past 6 years, but they now are able to easily access information back to 1999, and by next year will be able to easily go back 10 years. I’ve been wondering whether they might change the policy, but so far they haven’t.
As a practice management procedure, I always get a substantial deposit from multiple-year nonfilers, and a signed engagement letter. It can be a good niche business, but you need to protect yourself. Nonfilers often don’t like paying taxes or their accountants, or anybody, for that matter. My experience is that most nonfilers experienced some kind of event in their life that threw them a curve (divorce, drugs, alcohol, gambling, self-employment, etc). Many sincerely want to straighten out their taxes, but often wait until the IRS or a state agency backs them into a corner, or levies on their paycheck or bank account, or files liens. Many will follow through with you, but some won’t, so that’s why you want to get some money up front so you don’t wind up spending a lot of time fruitlessly.
John Stevens, EA
Stevens Tax & Accounting, Inc., dba Equi-Tax
1870 - 50th St. E., Suite 8
Inver Grove Heights ,MN 55077
651-773-5000
FAX 651-457-4529
equitax@unique-software. com
www.equitax.net
CONFIDENTIALITY NOTICE: The information in this message, and any files transmitted with it, is confidential, may be legally privileged, and intended only for the use of the individual(s) named above. Be aware that the use of any confidential or personal information may be restricted by state and federal privacy laws. If you are not the intended recipient, do not further disseminate this message. If this message was received in error, please notify the sender and delete it.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
From:
taxchat@yahoogroups [mailto:.com taxchat@yahoogroups ] On Behalf Of Donna L Loeffler CPA.com
Sent: 10/01/2008 12:35 PM
To:taxchat@yahoogroups .com
Subject: Re: [taxchat] Hasn't filed a tax return since 1999
Thank you, John, for the information. So far, the IRS hasn't done anything. Just the State has filed an SFR and that was for 2004.
So, what I understand is that I shouldn't file anything older than 2002.
However, should I calculate the depreciation for the "missing years" and continue to depreciate as though he filed those years? He has a retail business and he has residential rental real estate.DonnaDonna L. Loeffler, CPA936 Church Avenue St. Charles ,MN 55972 (507) 251-8119dllcpa@hbci.com The information in this message, and any files transmitted with it, is confidential, may be legally privileged, and intended only for the use of the inividual(s) named above. Be aware that the use of any confidential or personal information may be restricted by state and federal privacy laws. If you are not the intended recipient, do not further disseminate this message. If this message was received in error, please notify the sender and delete it.IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
John Stevens, Equi-Tax wrote:Donna,
IRS Policy Statement 5-133 pertaining to nonfilers says that you only have to file the last 6 years’ returns, which means that you would file for 2002-2007. If, however, the IRS filed “Substitutes for Returns” (SFR) for any period prior to 2002, I would prepare “Corrected Returns” (the taxpayer’s original returns) for those periods to replace the IRS’s SFR’s, in order to start the statutory running of the Collections Statute Expiration Date (CSED), and possibly to lower the tax calculated on the SFR’s by claiming deductions and possibly changing filing status and claiming extra exemptions for dependents. Note that if the IRS filed SFR’s the Corrected Returns need to be sent to a special address, depending on whether he was self-employed. You can get that address from the IRS.
John Stevens, EA
Stevens Tax & Accounting, Inc., dba Equi-Tax
1870 - 50th St. E., Suite 8
Inver Grove Heights ,MN 55077
651-773-5000
FAX 651-457-4529
equitax@unique-software. com
www.equitax.net
From:
[mailto: taxchat@yahoogroups .com ] On Behalf Of Donna L Loeffler CPA taxchat@yahoogroups .com
Sent: 09/30/2008 5:55 PM
To:taxchat@yahoogroups .com
Subject: [taxchat] Hasn't filed a tax return since 1999
I have a client who hasn't filed federal or state income tax returns
since 1999. I am going to order the 1999 tax return from the IRS.
However, I would like any tips from anybody as to what to do and what
not to do before I ask the IRS for copies of anything.
He has a notice from that state that they filed a return for him for
2004. They want the taxes they calculated.
I'm in the middle of a sales tax audit for this guy for 2004-2008. So,
it is really hard to get 2004 done without having the previous years
done first.
I know I sound really disorganized. I feel like I am--I have been
inputting into QuickBooks like crazy, just trying to get a grasp on all
of this financial information that he has been giving me. He gives me
it in pieces as he finds it.
--
Donna
Donna L. Loeffler, CPA
936 Church Avenue
, St. Charles MN 55972
(507) 251-8119
dllcpa@hbci.com
The information in this message, and any files transmitted with it, is confidential, may be legally privileged, and intended only for the use of the individual(s) named above. Be aware that the use of any confidential or personal information may be restricted by state and federal privacy laws. If you are not the intended recipient, do not further disseminate this message. If this message was received in error, please notify the sender and delete it.
IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
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