Reconstructing Returns for Non-Filers

This webinar will walk tax professionals through the process of gathering relevant data to prepare multiple years of unfiled returns for taxpayers. Our panel of experienced tax controversy advisers will discuss estimating unobtainable data, the applicable statutes of limitations, and options for settling the often significant balances due for these late-filed returns.

Having a client with multiple years of unfiled returns is always problematic. Key to filing the returns is gathering appropriate information and amounts for the preparation of the missed years. Of course, a tax preparer can prepare Form 2848 (Power of Attorney and Declaration of Representative) and obtain IRS transcripts. However, many taxpayers are self-employed or have businesses with incomplete or missing financial records. Some taxpayers may no longer have access to accurate financial information due to natural disasters or even theft. 

Relevant statutes of limitations need to be considered. The three-year statute of limitations for the IRS to assess tax only begins running when a return is filed. Per the collection statute, the IRS has 10 years from the date the tax is assessed to collect the tax due. Additionally, Policy Statement 5-133 in the Internal Revenue Manual states, "The enforcement period is not to be more than six years. However, the extent to which delinquency procedures will be enforced will depend upon the facts and circumstances of each case … ." Understanding how these rules apply to delinquent taxpayers is critical. 

Listen as our panel of IRS tax resolution experts explains reconstructing tax returns for taxpayers in arrears and offers advice to facilitate the preparation of prior year returns.