I may be off point on this, but I thought as long as a tax return was
not filed a year stayed open with the IRS. Why not file the missing
years without depreciation and then claim it on 2002? I haven't
stayed up with all the discussion on this topic so if I am "N/A"
that's ok.
Janet
--- In taxchat@yahoogroups
<equitax@...
>
> You raise a good point, Arnie. The usual situation I see the 3115
for is
> when a client has been filing returns all along, but for some
reason has not
> claimed depreciation for something (rental building, for example).
Clients
> sometimes think that they don't have to reduce the basis in the
property if
> they don't claim the depreciation - wrong! In that instance the
3115 is
> filed and all the back depreciation is taken on the current year's
return.
>
>
>
> Donna's situation is different. The returns prior to 2002 haven't
been
> filed, so it raises the question as to whether the missed
depreciation for
> those earlier years is allowable. We know it wasn't allowed since
no
> returns were filed. So maybe, as you suggest, since no returns
were filed,
> or will be filed, for those old years, her client can't take that
old
> depreciation on the 2002 return. I think some research needs to be
done to
> answer that one.
>
> 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@...
> www.equitax.
>
>
>
>
> _____
>
> From: taxchat@yahoogroups
Behalf Of
> Arnold M. Socol
> Sent: 10/01/2008 4:23 PM
> To: taxchat@yahoogroups
> Subject: Re: [taxchat] Hasn't filed a tax return since 1999
>
>
>
> My guess, No. Allowed and allowable is for accum deprec to date of
return.
> Can't take prior years depreciation if returns are not to be filed.
Take
> only the current years' deprec in the first year, 2002 like John
says.
> (unless John has a cite - and I do appreciate him - thanks John.
>
>
>
> ----- Original Message -----
>
> From: Donna L Loeffler CPA <mailto:dllcpa@
>
> To: taxchat@yahoogroups <mailto:taxchat@yahoogroups
>
> Sent: 10/01/2008 4:58 PM
>
> Subject: Re: [taxchat] Hasn't filed a tax return since 1999
>
>
>
> 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. <mailto:dllcpa@
> 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 <mailto:dllcpa@
>
> To: taxchat@yahoogroups <mailto:taxchat@yahoogroups
>
> Sent: 10/01/2008 4:27 PM
>
> Subject: 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. <mailto:dllcpa@
> 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@...
> www.equitax.
>
> 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
Behalf Of
> Donna L Loeffler CPA
> Sent: 10/01/2008 12:35 PM
> To: taxchat@yahoogroups
> 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.
>
> Donna
> Donna L. Loeffler, CPA
> 936 Church Avenue
> St. Charles, MN 55972
> (507) 251-8119
> dllcpa@hbci. <mailto:dllcpa@
> 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@...
> www.equitax.
>
>
>
>
> _____
>
>
> From: taxchat@yahoogroups
Behalf Of
> Donna L Loeffler CPA
> Sent: 09/30/2008 5:55 PM
> To: taxchat@yahoogroups
> 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. <mailto:dllcpa%
> 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.
>
>
>
>
>
>
>
>
>
> _____
>
>
>
>
>
>
> No virus found in this incoming message.
> Checked by AVG.
> Version: 7.5.524 / Virus Database: 270.7.5/1702 - Release Date:
10/1/2008
> 9:05 AM
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>
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>
> _____
>
> size=4 width="90%" align=center>
>
>
>
>
>
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> Checked by AVG.
> Version: 7.5.524 / Virus Database: 270.7.5/1702 - Release Date:
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> 9:05 AM
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> _____
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> size=4 width="90%"
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> align=center>
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>
>
> No virus found in this incoming message.
> Checked by AVG.
> Version: 7.5.524 / Virus Database: 270.7.5/1702 - Release Date:
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> 9:05 AM
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