Discussion Archives:Effect of filing no-tax returns on late filing penalties

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Discussion Forum Index --> Advanced Tax Questions --> Effect of filing no-tax returns on late filing penalties


Discussion Forum Index --> Tax Questions --> Effect of filing no-tax returns on late filing penalties

Jakescia (talk|edits) said:

28 July 2009
Assume that taxpayer has not filed returns for several years, but such taxpayer's income level was such that such returns were not required to be filed.

If returns are now filed for those unfiled years, in order to preserve continuity of information for such things as capital loss carryovers (Form 1041)and to commence the statute of limitations, can the IRS now assess late filing penalties of minimum amounts (100 per year in case of Form 1041) on the returns now filed------even though the filing requirements would not require the filings?

Thanks.

Pent-Up (talk|edits) said:

28 July 2009
If there is tax due, yes, Sec. 6651 is applicable.

Harry Boscoe (talk|edits) said:

28 July 2009
Are there tax-due returns that aren't required to be filed?

Kevinh5 (talk|edits) said:

28 July 2009
yes

Blrgcpa (talk|edits) said:

28 July 2009
The statue of limitations doesn't start to run until the tax return is filed.

I've filed tax returns with no income just to be on the safe side. I figure that 10 years down the road the client would not remember why the tax return wasn't filed.

Kevinh5 (talk|edits) said:

28 July 2009
nor why they paid a CPA to prepare a zero return

Harry Boscoe (talk|edits) said:

28 July 2009
Okay, I'll bite, what tax-due federal individual income tax returns are not required to be filed?

Blrgcpa (talk|edits) said:

28 July 2009
Very low income

Kevinh5 (talk|edits) said:

28 July 2009
those older than the past six years (because of IRS policy)

Skassel (talk|edits) said:

28 July 2009
Except that P-5-133 does not apply in Offer situations or when your client is a slug and has other reasons for which he wants to file back as far as we can go...in other words, not given DOJ another reason to come after him.

Harry Boscoe (talk|edits) said:

28 July 2009
So, even if a return isn't required to be filed, it can have a tax liability, and there can be a penalty? Is that what you're saying? I don't get it.

What tax-due federal individual income tax returns are not required to be filed?

Kevinh5 (talk|edits) said:

28 July 2009
read Steve's cite

Kevinh5 (talk|edits) said:

28 July 2009
(it's in my copy of the IRM, beginning at section 1.2.1)

Taxguy1024 (talk|edits) said:

28 July 2009
Ok....I'll take a stab at this. I think Jake is talking about a situation where there is no tax liability and no requirement to file a return, but he wants to file a return anyway to show things such as NOLs or capital losses that are being carried forward for the sake of continuity. The penalties are all based on a percentage of the taxes due on the return....so if there is no tax due, there's no penalty.

Irsfixer (talk|edits) said:

28 July 2009
A minimum penalty only applies if a tax is due. If no tax is due - there is no penalty.

Kevinh5 (talk|edits) said:

28 July 2009
does anyone really think that Jake is CIA as his name implies?

Skassel (talk|edits) said:

29 July 2009
Except in the state of California...California charges penalties on the tax...not the tax after withholding. So, if you have a California client, file those returns because the penalty is a bastard. BTW, California is the only state that charges a demand penalty which is a super failure to file penalty. It goes like this...I asked you to file the first time and I hit you with a penalty and now I'm telling you to file and if you don't I'm gonna hit you again.


Frankly, it's amazing we have a deficit with the kind of crap we get away with in this state.

Taxguy1024 (talk|edits) said:

29 July 2009
Alabama also charges a late filing penalty even if you are owed a refund.

Harry Boscoe (talk|edits) said:

29 July 2009
Will someone just describe a federal individual income tax return that has a tax liability but that is not required to be filed, please.

I don't do IRM.

Mscash (talk|edits) said:

30 July 2009
If there is a tax due before withholding it means that a return is required to be filed. You can't have a tax liability without a filing requirement.
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