Phil Marti <prm20871[at]verizon.net> wrote:

- quote -

No it isn't. It's too late to file them and get a _refund_
based on the new returns.

Providing the understatement of income was less than 25%,
those years can no longer be audited (if he filed reasonably
timely); if income was understated by 25% the IRS has 6
years. (I'm not certain that's still the rule.)

Seth

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jca wrote:

- quote -

He should file amended returns. He will not be in any
trouble beyond interest and penalties. The IRS has three
years from the due date or received date of the return,
whichever is later, to assess a tax. That assume there was
no substantial understatement of income or fraud. An honest
mistake is not fraud.


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jca wrote:

- quote -

Your friend is not going to jail, at least not for this. He
should file amended returns for the years involved and pay
the additional taxes. After a while the IRS will bill him
for interest and, perhaps, penalties. He should then pay the
interest and request that the penalties be abated. Once the
IRS has decided whether to abate any of the penalties they
might have assessed, he can go from there.

The most likely penalty is for "failure to pay" taxes when
due. The maximum is 25% of the taxes due.

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"jca" <jca22[at]excite.com> wrote:

- quote -


Those years are most likely out of statute. Accordingly,
absent fraud, there is nothing to do at the present time.

--
This written advice was not intended or
written to be used, and it cannot be
used by any taxpayer, for the purpose
of avoiding penalties that may be
imposed on the taxpayer.
(The foregoing legend has been affixed
pursuant to U.S. Treasury Regulations
governing tax practice.)

<<< Benjamin Yazersky CPA [NJ & NY] > > ---> real address on hobokenx or hobokeni <---

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"jca" <jca22[at]excite.com> wrote:

- quote -

It was probably a tax shelter scam that he bought into.

- quote -

Your friend needs to keep better contemporaneous records.
That way he wouldn't be sorting through 1999 and 2000
records trying to figure out 2005 mileage.

It's too late to file amended returns for 1999 and 2000. If
your friend wants to make right, tell him to calculate what
tax he should have paid and make a contribution toward
reducing the public debt. Instructions for doing that are
in the 1040 instructions.

--
Phil Marti
Clarksburg, MD

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A really good friend of mine has always paid his taxes on
time, always filed on time etc. About 25 years ago, an
investment of his got disallowed (some kind of limited real
estate partnership or something -- sorry I do not know any
more) and the IRS asked for a BUNCH of money in back taxes
for that year. He paid up and has had no problems since.
Was audited once after that, and did not owe. He was just
going through his records this last year figuring out
mileage and realized that he had not added some commissions
he received from an advertising agency for referring acounts
to them in 1999 and again in 2000. The amounts were about a
total of $3,000 one year and about $4,000 another. (All in
smaller amounts throughout the year.) He did not get a 1099
or any type of documentation from them and that is why he
totally forgot about this money. He is petrified that he
will be audited for this and will "GO TO JAIL". Should he
file amended returns or just let it go hoping that everyone
just forgot? Is there a statute of limitations on this?
What would be his penalties and could he actually go to jail
if the IRS caught this? Thanks to anyone who helps. I
really appreciate ANY assistance.

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