1120-S not filed for three years

Technical topics regarding tax preparation.
#1
Bell  
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This is actually a continuation of a previous post, but what I thought was just concerning 2017 has become much more.

TP has not filed his 1120-S nor his 1040 for three years and did not get an extension for 2017.

He originally, only asked me to file his 1040 and leave off the K-1 and amend it later. Now I find out he hasn't filed either return for three years.

How do I advise him? He can't get his books in order to file the 1120-S, however he says it is now shut down. Should I advise him to file the 1040 for all three years and file the form that discloses the fact that the K-1 is missing? He thinks it will net losses in all 3 years.

Not sure how best to move forward, but I know not filing at all is not the answer.

Thanks, to all for all the input.
Last edited by Bell on 20-May-2018 6:33am, edited 1 time in total.
 

#2
CathysTaxes  
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Dump him. Last week I sent two ten day demand letters to loser client for fees related to getting their 2016 QBO files for their proprietorship and file their return. They have not filed, not paid estimated taxes since 2004. I did get them to send a measly $1000 for the extension. In my defense, I started getting paid up front, used up a retainer, and received a partial payment right before doing the return.

It was my intent to disengage. I received email yesterday along with the email cancelling my access to their files, they had hired another accountant. And they didn't understand why I was asking for money but they were sending a cashier's check.

When I prepared the return, I just received payment for more than half of what was owed.

It took a couple of years for them to cooperate to get one year done. It wasn't complete and I informed them in writing what was missing.

They also said they didn't make a lot of money and when I ran the PnL, the figures confirmed that. They qualified for EIC but it didn't pass the smell test. They imported the transactions from their checking account. Upon review of the bank statements I found that all of their personal expenses were being paid using the business check book. Net income after I was done was over $100,000.
Last edited by CathysTaxes on 19-May-2018 6:58am, edited 1 time in total.
Cathy
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#3
ATSMAN  
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I agree with Cathy. If you have not already signed an engagement letter, get a large deposit upfront and start with the earliest unfiled return. In 2007 I was referred by by client to one of his contacts who had not filled 1065 for a couple of years. We filed the open years first starting with the earliest, If I recall 2 of those years was a loss and IRS never asked him to file the earlier unfiled returns. He did pay interest and penalty for the 1040 returns that were amended.
 

#4
Frankly  
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Bell wrote:How do I advise him?
He needs to file his unfiled tax returns going back 6 years. You piece it together the best you can and file with the requisite disclosures. Set him up in an installment agreement. Bring this errant TP back into compliance.

An alternative is to send him to the other side of town across the railroad tracks and you can let Bubba file for him and thus you've supported the unscrupulous tax prep business. Those guys thrive on the clients dumped by other practitioners.
 

#5
JR1  
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I'm with Frankly. He needs your help. So as long as there's a way to get there....help him get there.
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#6
makbo  
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What is "worse than you thought"?

Since more than one moderator has participated in both this thread and the previous one from the same OP created with a meaningless subject line, are we to assume that the following forum guideline is no longer in effect?

"Use meaningful topic titles. For example, a title like "Proper way to handle 1031 exchange?" is better than "Anyone know this?". We rely on topic titles for both preview efficiency and to help the search engine perform better. "

I respectfully suggest that either the guideline be removed if no longer applicable, or else that the moderators make at least a minimal effort to enforce it. Normally I would flag the post, but I figured that since moderators themselves were participating in the thread, they would already be aware of the issue.
 

#7
CathysTaxes  
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Makbo is right. Bell, please edit your subject.
Cathy
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#8
Bell  
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Sorry about the subject line. I edited this one, but cannot edit the other. I will be more careful with the subject line in the future. Again, truly sorry.
 


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