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I know there are a number of CPA's and Tax Professionals who frequent here; so here is my situation and question.
My older Sister is currently in a SNF and her 2022 IRS1040 will likely be her final. I have discovered that she had not filed taxes for 2019, 2020, and 2021!
I contacted the IRS via their on-line tool and learned that due to her low income in 2019, and no income in 2020 and 2021, that she did not need to file. Whew!
Her 2022 filing will likely include sale of her home as well as being a Deceased return.
As her POA, should I file the delinquent returns now?
Are you also the executor of her estate? If so, I'd file now so there would less to do after she passes. If not you could leave it for the executor to deal with. That's be sort of mean but a lot simpler for you.
If the IRS indicates filing is not required based on income level (hopefully this was double checked), how are they delinquent?
Ok, no not technically delinquent for the years mentioned. But a 2022 submittal after a 3-hiatus in filing might cause questions.
Should I be proactive and file those three years now?
Should I file those three years retroactively with her 2022 Final & Deceased filing?
Should I forget about them and file only her Final & Deceased return when applicable?
Ok, no not technically delinquent for the years mentioned. But a 2022 submittal after a 3-hiatus in filing might cause questions.
Should I be proactive and file those three years now?
Should I file those three years retroactively with her 2022 Final & Deceased filing?
Should I forget about them and file only her Final & Deceased return when applicable?
I wouldn't worry so much. Just get the 2022 return filed. You are overthinking this.
Ok, no not technically delinquent for the years mentioned. But a 2022 submittal after a 3-hiatus in filing might cause questions.
Should I be proactive and file those three years now?
Should I file those three years retroactively with her 2022 Final & Deceased filing?
Should I forget about them and file only her Final & Deceased return when applicable?
As always, YMMV but, as long as you're confident filing was not required for the prior years, just file the final. We went through this with my MIL, though it was only for one year prior to the final. She didn't file in 2016 and there was no issue when we filed the final in 2017.
You were smart to figure out that returns were not required for income tax purposes.
Since they are not required I would not file as they could confuse the situation.
If you are filing her final return on paper I would type a note on the bottom of page 1 saying not required to file in xxx due to low or no income. Don't know if this will do any good.
I would expect not filling these returns and just filing the final return will give you the least amount of problems.
You mentioned selling her home. Check but I think the first 250,000 of profit is not taxed. Be sure to increase her basis (cost) of the home by any improvements she made.
I would ask the social worker at the SFN if they have any advice now that will help you manage the situation.
My mom had not filed any returns for several years due to income being below the limit. That was also the case in the year she died, so I did not file a final return for her. I later got a letter from IRS regarding a mutual fund sale in the year she died. The funds were sold and the money was given to heirs. I had to file a final return showing there had not been enough profit from the sale of the funds to require a tax return for that year. IRS had only gotten notice of the gross amount of the sale from the brokerage account. They did not have the cost basis to be able to see there was not much profit.
IMO there is no need to file for past years for your sister. If you need to file a final return, IRS will let you know. Just hold onto her paperwork.
I know there are a number of CPA's and Tax Professionals who frequent here; so here is my situation and question.
My older Sister is currently in a SNF and her 2022 IRS1040 will likely be her final. I have discovered that she had not filed taxes for 2019, 2020, and 2021!
I contacted the IRS via their on-line tool and learned that due to her low income in 2019, and no income in 2020 and 2021, that she did not need to file. Whew!
Her 2022 filing will likely include sale of her home as well as being a Deceased return.
As her POA, should I file the delinquent returns now?
There is no reason to file the old returns, they are not delinquent, they were never needed. I stopped filing taxes for my mom years before she died, because her income was low enough that filing tax return wasn't required. If you don't owe anything and won't get anything back there is no reason to.
I know there are a number of CPA's and Tax Professionals who frequent here; so here is my situation and question.
My older Sister is currently in a SNF and her 2022 IRS1040 will likely be her final. I have discovered that she had not filed taxes for 2019, 2020, and 2021!
I contacted the IRS via their on-line tool and learned that due to her low income in 2019, and no income in 2020 and 2021, that she did not need to file. Whew!
Her 2022 filing will likely include sale of her home as well as being a Deceased return.
As her POA, should I file the delinquent returns now?
Keep all written communications with IRS on file (incl the e-mail where they said she did not need to file tax returns in 2019, 20 or 21. They are not delinquent since they were not required). When you file her 2022 tax return (of her home is sold, whether or not she is deceased - hopefully not), just attach a statement to the 2022 tax return (along with a copy of the email from the IRS) stating that she was not requiredto file 2019, 20 and 21 returns due to insufficient income. At least that is what I would do.
On a different tax-related subject, I sent my 2021 paper tax returns 3 months ago. The state return was processed immediately. I have an IRS online account which just says that my 2021 return has not been processed yet. It does not say whether it was received, or anything else. I am expecting a refund.
I asked this in the Economics forum too: at which point do I need to do something about this, and what? I know they have juge delays in processing of returns, but what should I do if there are no news from them by October?
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