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How can I best help a client that has 10 years of tax filings to catch up on?

Andrew K's Profile

I had someone approach my firm and ask to help them file past tax returns. This client has not filed since 2008, and it appears he may owe taxes between 2008-2012 (he withdrew early from an IRA to put funds into a dying side business). I've agreed to help him file these past returns, but this is a new situation for me. What documents (besides old 1040's and supporting W-2s) would I need to include with these prior returns? Do I need a power of attorney doc (Form 2848), or just a Form 8821? I'm also not sure if it would be best to reach out to the IRS on my client's behalf in order to get started in working with the IRS to get all prior taxes settled. Has anyone gone through a process like this? Any advice?

Answers

Andy Vance
Title: Editor
Company: TaxExplorer.Club, LLC
(Editor, TaxExplorer.Club, LLC) |

If the client is not under audit or other criminal or civil investigation you should be able to do a Voluntary Disclosure. You should try and determine if the client is under investigation. If so all you can do is file the forms and hope for the best.

The IRS recently updated its voluntary disclosure practice and issued a memo that can be found here:

https://www.irs.gov/pub/foia/ig/spder/lbi-09-1118-014.pdf

It sounds like the client really didn't make money during the years in question. If that can be established the IRS might only ask for 6 prior years instead of the ten, as noted in the memo.

I think it would be best to get a power of attorney with Form 2848 so that you can help the client through the process.

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