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#1
Old 04-22-2012, 10:29 PM
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What is the oldest back tax return that has been filed?

A few years ago, I went on a little journey with the IRS regarding a three year old tax return that I initially didn't know needed to be filed (I thought that I wasn't required to file that year and it turns out I was.) I ended up owing a little tax when I filed and the IRS was fairly gentlemanly about it and the matter was resolved.

Anyway, what is the latest (as in most past the deadline) tax return (of any US or non-US taxation authority, and regarding any subject of taxation, whether income or not) that has been filed? For example, does the IRS still occasionally receive past due income tax returns from the 1960's or 1970's? To what extent are taxation authorities equipped to handle very old returns? For example, if an 80 year old goes into his paperwork drawer to reminisce about old times and finds his 1968 Federal Income Tax return all ready for filing, and it turns out that he forgot to mail it in and the IRS somehow never bothered him over it, what would actually happen if he filed it now?

For the purpose of this question, the reason that the return was late (e.g. misunderstood the law, misunderstood the facts relating to the person's actual situation such as their actual income, lost documents, or intent to defraud the government) is not relevant.
#2
Old 04-22-2012, 10:49 PM
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Dunno how you'd go about finding information about what the record is for late filing: I can't think of anyone who'd possess that information except the IRS, and I suppose they would not be eager to advertise the fact that some folks have been walking around for decades with their taxes unpaid.

However, you can find tax preparing firms on the internet claiming they've helped filers with back taxes from 20 years ago or more. This site claims one of their recent customers filed a 1040 from 1980.
#3
Old 04-23-2012, 12:04 AM
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Quote:
Originally Posted by Kimstu View Post
Dunno how you'd go about finding information about what the record is for late filing: I can't think of anyone who'd possess that information except the IRS, and I suppose they would not be eager to advertise the fact that some folks have been walking around for decades with their taxes unpaid.

However, you can find tax preparing firms on the internet claiming they've helped filers with back taxes from 20 years ago or more. This site claims one of their recent customers filed a 1040 from 1980.
WHAT? I could swear there was a statue of limitations on how far back the IRS can go after you, either 5 or 10 years? After that they cannot audit you or try to claim taxes they did not catch, which is why you are advised to keep receipts and documents for that time only.

If the IRS can stop and audit anyone for their deductions or non-filing in 1980 how could you even defend yourself?! Who has records from then anymore?

http://etaxes.com/statute_of_limitations.htm

Quote:
Many people incorrectly believe that the IRS can collect back taxes until the day you die. Some believe the IRS can collect taxes even after you are dead.

Fortunately, the law isn't that bad. The statute of limitations limits the time during which an action can be brought by the IRS for a tax audit and the time for IRS tax collection activities. Generally, there is a 3-year statute of limitations for the IRS auditing a tax return and a 10-year statute of limitations for the IRS collecting tax.

Last edited by grude; 04-23-2012 at 12:07 AM.
#4
Old 04-23-2012, 02:00 AM
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CPA checking in. The above rules are correct for the statute of limitations on filing a federal income tax return to claim a refund (3 years from original due date), being selected for audit (3 years from original due date, even if you filed it earlier), and for the IRS to collect tax on a filed return (10 years from the date the tax liability is finalized, which could be more than 10 years from the date filed if there is an audit or other assessment involved).
However, there are scenarios for which a very old return could be filed. For example, a taxpayer might not have filed a return for 1990, because they were under the filing threshold. However, for that year they sold a stock for a large capital loss. Capital losses can be carried forward indefinitely until they are used to offset capital gains or to claim the max each year of 3,000 to offset other income. If the loss or some portion of it could be carried forward to the years in which he could still claim a refund, this taxpayer would want to go back and file to claim the loss and subsequent carryforward and then amend each subsequent return in order to take advantage of the old loss.
There are other scenarios where someone might want or need to go back and file an old return, if anyone is interested I can give more examples.
The oldest returns I ever prepared for a client were for all years from 1994 to 2009.
#5
Old 04-23-2012, 05:34 AM
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Quote:
Originally Posted by grude View Post
WHAT? I could swear there was a statue of limitations on how far back the IRS can go after you, either 5 or 10 years? After that they cannot audit you or try to claim taxes they did not catch, which is why you are advised to keep receipts and documents for that time only.

If the IRS can stop and audit anyone for their deductions or non-filing in 1980 how could you even defend yourself?! Who has records from then anymore?

http://etaxes.com/statute_of_limitations.htm
Go to the original source material, not to random web sites.
26USC66501
You can read the whole thing at the link above, but here are some pertinent quotes:
Quote:
(a) General rule
Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed...

(b) Time return deemed filed
(1) Early return
For purposes of this section, a return of tax imposed by this title, except tax imposed by chapter 3, 21, or 24, filed before the last day prescribed by law or by regulations promulgated pursuant to law for the filing thereof, shall be considered as filed on such last day.
...

(c) Exceptions
(1) False return
In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.
(2) Willful attempt to evade tax
In case of a willful attempt in any manner to defeat or evade tax imposed by this title (other than tax imposed by subtitle A or B), the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.
(3) No return
In the case of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.

(e) Substantial omission of items
Except as otherwise provided in subsection (c)
(1) Income taxes
In the case of any tax imposed by subtitle A
(A) General rule
If the taxpayer omits from gross income an amount properly includible therein and
(i) such amount is in excess of 25 percent of the amount of gross income stated in the return
...
the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time within 6 years after the return was filed.
Note, this applies to federal income taxes. States have their own rules.
#6
Old 04-23-2012, 08:18 AM
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Quote:
Originally Posted by Nothar View Post
CPA checking in. The above rules are correct for the statute of limitations on filing a federal income tax return to claim a refund (3 years from original due date), being selected for audit (3 years from original due date, even if you filed it earlier), and for the IRS to collect tax on a filed return (10 years from the date the tax liability is finalized, which could be more than 10 years from the date filed if there is an audit or other assessment involved).
However, there are scenarios for which a very old return could be filed. For example, a taxpayer might not have filed a return for 1990, because they were under the filing threshold. However, for that year they sold a stock for a large capital loss. Capital losses can be carried forward indefinitely until they are used to offset capital gains or to claim the max each year of 3,000 to offset other income. If the loss or some portion of it could be carried forward to the years in which he could still claim a refund, this taxpayer would want to go back and file to claim the loss and subsequent carryforward and then amend each subsequent return in order to take advantage of the old loss.
There are other scenarios where someone might want or need to go back and file an old return, if anyone is interested I can give more examples.
The oldest returns I ever prepared for a client were for all years from 1994 to 2009.
CPA here with a question......... how far back have you been able to get refunds?

I've heard that they don't have to refund overpayments after so many years.
#7
Old 04-23-2012, 08:28 AM
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Quote:
Originally Posted by What the .... ?!?! View Post
CPA here with a question......... how far back have you been able to get refunds?

I've heard that they don't have to refund overpayments after so many years.
We just filed for refunds up to 3 years back as the statute indicated. Have never tried to get a refund for any further back, as I would be concerned that even if they granted a refund for some reason it might come back to bite me in the future.
#8
Old 04-23-2012, 01:23 PM
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Originally Posted by Nothar View Post
We just filed for refunds up to 3 years back as the statute indicated. Have never tried to get a refund for any further back, as I would be concerned that even if they granted a refund for some reason it might come back to bite me in the future.
Thanks....were there no overpayments in the years 1994 - 2006 of that long series of returns you filed?

Are you saying that in other instances you just didn't file if there were clearly overpayments?

Back to the first....... you must have thought filing 15 years of tax returns didn't raise a big red flag in the first place?
#9
Old 04-23-2012, 01:28 PM
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The statute of limitations for a federal return doesn't start ticking until a return is filed. This include the statute for collecting tax. There are also a variety of actions that can keep the statute active, such as amending a return. If you amended your tax return every two years, you could theoretically keep the statute active forever.

Refunds can only be collected for 3 years from the due date/2 years from the date tax is paid.

As far as the oldest... my personal record is 8 years. I have a client with an unfiled return that is now 12 years old, but the IRS only demanded 2004-2007; if they want 2000-2003, we'll deal with it after they ask for it.

I know a tax professional who had the state of Virginia go after a client's 1989 return in 2008, basing their assessment on non-filing status. The taxpayer thought they had filed and didn't have much in the way of records.
#10
Old 04-23-2012, 06:51 PM
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Quote:
Originally Posted by dracoi View Post
The statute of limitations for a federal return doesn't start ticking until a return is filed. This include the statute for collecting tax. There are also a variety of actions that can keep the statute active, such as amending a return. If you amended your tax return every two years, you could theoretically keep the statute active forever.
No. An amended return filed within 60 of the expiration of the statute might extend it for up to 60 days, but otherwise an amended return does not affect the statute of limitations.

See IRM Sec 25.6.1.9.4.2
Quote:
25.6.1.9.4.2 (04-01-2007)
Amended Return

1.

In general, the filing of an amended return by a taxpayer does not extend the statute of limitations on assessment. If an amended return is received within 60 days from when the Assessment Statute Expiration Date would otherwise expire, a period of 60 days from the received date is allowed for the assessment of the additional amount of tax on that return imposed by Subtitle A (income tax). IRC 6501(c)(7). For example, if an amended income tax return for the 2003 tax year was received on April 9, 2007, you would have 60 days from that date to assess the additional amount of tax on that income tax return.
Also see IRC Sec 6501(c)(7).
#11
Old 04-24-2012, 08:19 AM
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Quote:
Originally Posted by dracoi View Post
The statute of limitations for a federal return doesn't start ticking until a return is filed. This include the statute for collecting tax. There are also a variety of actions that can keep the statute active, such as amending a return. If you amended your tax return every two years, you could theoretically keep the statute active forever.

Refunds can only be collected for 3 years from the due date/2 years from the date tax is paid.
That kind of stinks doesn't it? I wonder if there is a good reason why you can owe taxes for years and years..... but they stop oweing you after just a few.
#12
Old 04-24-2012, 09:34 AM
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Quote:
Originally Posted by grude View Post
If the IRS can stop and audit anyone for their deductions or non-filing in 1980 how could you even defend yourself?! Who has records from then anymore?
When my dad passed away a few years ago we found his tax returns back to 1955 IIRC... along with all the supporting documentation.
#13
Old 04-24-2012, 12:09 PM
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Quote:
Originally Posted by What the .... ?!?! View Post
Thanks....were there no overpayments in the years 1994 - 2006 of that long series of returns you filed?

Are you saying that in other instances you just didn't file if there were clearly overpayments?

Back to the first....... you must have thought filing 15 years of tax returns didn't raise a big red flag in the first place?
There were no overpayments for the years filed until the most recent year because the client did not have any withholding or estimated payments. He was a rich trust find kid who never really worked until he was almost 40. In his early 20's he sold the stock that he had inherited as a young child, but never filed the return since it was a loss and he had no other income. He lived off his parents until he finally went to work for his Dad and started generating income. Each return from after the 1994 return which showed the stock sale was just filed to show the capital loss carryforward so that it could be used for his most recent return.
The client was not concerned with the IRS looking at all these returns being filed together since there was nothing there to look at besides the carryforward.
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