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Author: richardsallen Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121567  
Subject: Re: Not filing for years? Date: 3/2/2001 11:18 PM
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Footsox,
I am a CPA working in the area of tax controversy. Your friends definitely need to get their returns filed. The statute of limitations on assessment, collections, etc never begins to run until the returns are filed and at some point the IRS may file returns for your friends known as Substitutes for Returns. These SFRS do not start the statute and rarely are in the taxpayer's best interest. The IRS will still accept a return after an SFR is filed.
Your friend needs to find a CPA or EA who is knowledgable in this area and accustomed to this work. If your friend had extenuating circumstances, the professional may be able to get the penalties and interest on penalties reduced. Many professionals don't like this kind of work. If your friend should encounter this attitude, find someone else. There are some organizations that make referrals to professionals who specialize in this area. One of them is www.irsproblemsolvers. Your friend should not deal with someone over the internet, but should find someone with a regular location. They should inquire as to who will be working on their situation; whether or not the CPA will consider the effects of possible criminal charges by getting a Kovel agreement with an attorney. CPA's have privileged communications in civil matters, but not criminal matters and not filing may have a criminal element that only a professional can determine. Generally, a Kovel provides an umbrella of privileged communication for what is told the CPA by the client. Therefore, there are usually 2 fees, a small one to an attorney for the Kovel and the normal fees for the CPA. Very few of the cases I work require a Kovel agreement. Some may go straight to tax attornies. Not all attornies are set up to do old tax returns, business compilations necessary for the preparation of returns, etc. This is still a viable route. Your friend should avoid anyone who makes promises of reducing their taxes. Such a guarantee is useless. Typically, the non-filer will in the initial meeting go over the basics of their situation. The professional should lay out in a written engagement letter what they will do and give at least an estimate of the fees and how the fees will be charged. It is unreasonable to expect to be billed in this situation. Rarely, will people engaged in this work, desire to stand in the line with other people who haven't been paid after doing this work. So, expect upfront fees, but expect some estimation of those fees.
It took your friend years to get into this situation and it will take time to get out of it. Use good judgement in choosing your professional. Stick with them, follow their directions carefully, adhering to deadlines and understand that they are dealing with a bureaucracy (the IRS) so don't expect things to happen speedily. In time, your friend will be able to lead a normal life again, free of the challenge of liens, levies, etc. Hope this helps.
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