Parent's Delinquent Returns

[eddie57]

What is the name of your state (only U.S. law)? Texas

My mother recently passed away after having been ill for some time. After the passing I discovered that my parents who are elderly had not been filing their returns for the last 6 years. My father said he was unaware that they were not filed. He has a heart disability and is very forgetful. I recently completely the returns and have determined that my father owes a substantial amount for one year and a moderate amount for two other years. The other three returns have a small amounts due. My father does not have enough cash to pay the full amount of the total tax liability due but can pay approximately 25 percent and the rest on installments. I know there will be penalties and interest when the IRS responds. Should I mail the returns all at once or mail them in one at a time? Should my father include the payment of 25 percent of total tax liability with the return along with an explanation and request for an installment agreement? Any suggestion are appreciated."

[abys32]

Originally Posted by eddie57

What is the name of your state (only U.S. law)? Texas

My mother recently passed away after having been ill for some time. After the passing I discovered that my parents who are elderly had not been filing their returns for the last 6 years. My father said he was unaware that they were not filed. He has a heart disability and is very forgetful. I recently completely the returns and have determined that my father owes a substantial amount for one year and a moderate amount for two other years. The other three returns have a small amounts due. My father does not have enough cash to pay the full amount of the total tax liability due but can pay approximately 25 percent and the rest on installments. I know there will be penalties and interest when the IRS responds. Should I mail the returns all at once or mail them in one at a time? Should my father include the payment of 25 percent of total tax liability with the return along with an explanation and request for an installment agreement? Any suggestion are appreciated."

You know, I seem to remember reading something on the IRS website about why you should pay your taxes, and I think they even recommend against an installment agreement. I don't remeber why and I was looking under business taxes rather than personal. If its a lot of money, I think the cost of a tax attorney will ultimately pay off in the end....meaning it will save you more than the attorney will cost and then you also get rid of the headache, which is worth more than money.

[abys32]

An accountant may also be able to help. Maybe someone here could clarify the difference between what an accountant would do versus an attorney. I'm not really sure. An accountant can file relief. Maybe an attorney is used if must go to court.

[LdiJ]

Originally Posted by eddie57

What is the name of your state (only U.S. law)? Texas

My mother recently passed away after having been ill for some time. After the passing I discovered that my parents who are elderly had not been filing their returns for the last 6 years. My father said he was unaware that they were not filed. He has a heart disability and is very forgetful. I recently completely the returns and have determined that my father owes a substantial amount for one year and a moderate amount for two other years. The other three returns have a small amounts due. My father does not have enough cash to pay the full amount of the total tax liability due but can pay approximately 25 percent and the rest on installments. I know there will be penalties and interest when the IRS responds. Should I mail the returns all at once or mail them in one at a time? Should my father include the payment of 25 percent of total tax liability with the return along with an explanation and request for an installment agreement? Any suggestion are appreciated."

He should file all the returns at once, but in a separate envelope for each return. He should pay the taxes due on the three returns with small amounts with the returns. He should send a token payment with each of the other three returns, unless the 25% he can pay up front would cover the two that have moderate amounts due..in that case he should send full payment with one or both of those as well. (the fewer years involved in the installment agreement the better)

He should let the IRS process the returns and send him any bills for penalties and interest, and once he has bills for all of the returns he should again pay off the interest and penalties on the small ones, and then he should send in installment agreements for the years unpaid in full. He can send one installment agreement to cover all the years.

A tax attorney is absolutely NOT needed. He should not waste that money. However, a politely worded letter, explaining the situation and asking for a waiver of the penalties, might get the penalties waived...its not guaranteed, but it could happen. Send the letter with the installment agreement.

[1000Sparks]

My experience: (Wisconsin)

Was very sick for a year...didn't pay taxes/withholdings/etc. on time...got lots of late charges, interest....call IRS and explained. They were so nice.

Disregarded all late fees and penalties. Told me to keep paying and try to make them on time from now on.

The IRS WILL work with you....now the State dept. of revenue was a different story...

[eddie57]

Originally Posted by LdiJ

He should file all the returns at once, but in a separate envelope for each return. He should pay the taxes due on the three returns with small amounts with the returns. He should send a token payment with each of the other three returns, unless the 25% he can pay up front would cover the two that have moderate amounts due..in that case he should send full payment with one or both of those as well. (the fewer years involved in the installment agreement the better)

He should let the IRS process the returns and send him any bills for penalties and interest, and once he has bills for all of the returns he should again pay off the interest and penalties on the small ones, and then he should send in installment agreements for the years unpaid in full. He can send one installment agreement to cover all the years.

A tax attorney is absolutely NOT needed. He should not waste that money. However, a politely worded letter, explaining the situation and asking for a waiver of the penalties, might get the penalties waived...its not guaranteed, but it could happen. Send the letter with the installment agreement.

First and foremost thank you and everyone for replying. I liked your suggestion LdiJ. I will meet with my father as to our plan of action. You mentioned to place each return in a separate envelope. Did you mean to mail each one individually or to place them in separate envelopes and then in one larger envelope and mail them in one package. Once we hear from the IRS we will send them a letter requesting the waiving of penalties and interest. Again, thank you for your assistance. Have a nice day.

[LdiJ]

Originally Posted by eddie57

First and foremost thank you and everyone for replying. I liked your suggestion LdiJ. I will meet with my father as to our plan of action. You mentioned to place each return in a separate envelope. Did you mean to mail each one individually or to place them in separate envelopes and then in one larger envelope and mail them in one package. Once we hear from the IRS we will send them a letter requesting the waiving of penalties and interest. Again, thank you for your assistance. Have a nice day.

Mail them separately...not all in a big envelope. I know that sounds counterproductive, but sending multiple returns in the same envelope has historically caused enough trouble that pretty much all tax professionals recommend that you send them separately.

[eddie57]

Thank you very much for your assistance. Have a great week!

Eddie

[eddie57]

Originally Posted by LdiJ

Mail them separately...not all in a big envelope. I know that sounds counterproductive, but sending multiple returns in the same envelope has historically caused enough trouble that pretty much all tax professionals recommend that you send them separately.

Hi again,

I forgot to ask you if I should mention in a letter to the IRS the reason the returns were not filed?

E

[mtpockets]

My mother recently passed away after having been ill for some time. After the passing I discovered that my parents who are elderly had not been filing their returns for the last 6 years.

Attach a statement to each return explaining that your mother recently passed away after having been ill for some time and that your father is elderly. Ask that the penalties be waived. (Interest cannot be waived.)

[LdiJ]

Originally Posted by mtpockets

Attach a statement to each return explaining that your mother recently passed away after having been ill for some time and that your father is elderly. Ask that the penalties be waived. (Interest cannot be waived.)

You can do that, but its also just as productive to give that explanation and make that request after they have processed the returns and you are asking for the installment agreement.

[eddie57]

Originally Posted by LdiJ

You can do that, but its also just as productive to give that explanation and make that request after they have processed the returns and you are asking for the installment agreement.

Again, thank you for all your assistance.