Name: Tips & Tricks for Non-Filer Cases
Uploaded: 2026-10-19T17:36:05.366Z
Duration: 1 h 20 min 4 s
Description: Tips & Tricks for Non-Filer Cases

Transcript for "Tips & Tricks for Non-Filer Cases": Hi, everyone. Thank you so much for joining us today. My name is Tracy Brown, and I lead education for the pro tax group here at Intuit. Just wanted to take a couple minutes of your time before the session begins to make sure you're already to get the most out of your time with us today. If you take a look over at the right hand side of your screen, you'll see two tabs that are constant throughout the session today. Docs will contain all of the handouts for today's session. Please feel free to click and save those to your machine for reference either today or at a later time. And the q and a tab is where you'll ask any questions that come up throughout your session today. We have a number of experts staffed in the backstage waiting to answer your questions as quickly as they can. When your speaker launches a poll, you will see a new tab open up for polls on your right hand panel. The speaker will also share the poll to the stage. 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In order to earn them, you need to be in attendance for at least fifty minutes and submit responses for at least three of the interactive polls. Certificates will be emailed after today's session concludes within forty eight hours. If you don't see your certificate within that time frame, please email us at protax_training@intuit.com. Your certificates may end up in your spam or junk folder, so please check there if you don't see anything. If this session is eligible for CE, we will submit directly to the IRS on your behalf within ten days. And finally, for our disclaimer, this session is educational in in nature and should not be construed as tax advice. Alright. That's all I have to share with you. I'm gonna hand it over to your speaker. I hope you really enjoy your time with us. Thanks again for joining. Hi, everyone. I'm Angeline Wirsbeck, and today we're gonna focus on a practice that we run into quite often. There's a lot of people out there who haven't filed. So we're gonna go over some of the tips and tricks and practices for when we are dealing with cases that people are coming into us after they haven't filed and fell out of compliance with the IRS. So a little bit about myself. I am a certified tax resolution specialist and an enrolled agent. I specialize in helping people with tax issues, so people with collection issues, non filer issues, audits. Those are all my little niche. One thing that comes off quite often is how do these non filers get into this position. And oftentimes, it's like a snowball going downhill. One little event happens in their life and after that, all of a sudden, the tax problem just kind of snowballs and continues to grow and grow. That's why sometimes people come into, for example, my office and I've had people tell me I haven't filed in as far as twenty years. That's a crazy amount, but normally when you start talking to them, there... It comes down to, like, one life issue that happened, and that's what actually, like, perpetuated the whole mess. And when you start discussing this with people, a lot of times, it's like a family crisis we hear about. You know, somebody in the family was sick. They were caretaking. Or other times, it's, you know, things that disrupt life. Like, somebody had a death in the family, then they went into depression or divorce, and then they were struggling with, you know, everything going on with that. So it's not necessarily that these people, like, intentionally, like, go out and wanna be like, hey. I don't want to, I don't wanna file IRS. I don't care about my taxes. They genuinely do and it, like, weighs on them. Other times, they have prior tax balances and they don't know what to do. Or another one that we commonly see when people are going through audits or they've just recently gone through audits, if they're not sure what the IRS is changing or what the IRS is looking at or why the IRS, made adjustments to their return, if they don't understand that, what happens sometimes is they don't know how to file. They don't know what to do. Other times, it's people who go from working a w two job to being self employed. All of a sudden, they're in this position that, hey. I don't know how I should be filing. I've got all these receipts. I don't know what I should be doing. You know? Or they, you know, retire and don't think that they need to file and ultimately something shows up where they should have. So these are not people, like I said, who intentionally want to go out and say, you know, I don't wanna file my return. So in my example of the person who hadn't filed in twenty years, that was actually the longest I've ever heard. How do we even begin their case? And we have our first polling question here. We're gonna give you a little bit of a cliffhanger. So what is your primary reason for attending this webinar? Is it to earn free CPE, to explore new ops... New solutions, to solve a specific problem, or just a general interest or is there some other reason? And while you click the button and answer the poll, gonna wait a moment. Alright. Cool. All the answers are coming in. Okay. Awesome. Great. Looks like everybody's in. So there are some steps that we generally wanna take with these cases. So first off, we want to be able to get authorization from our client to get the IRS records because nothing is worse than coming in and trying to get somebody caught up and then all of a sudden the IRS double checks the returns against the records and audits them because stuff is missing. So we wanna make sure all the pieces of the puzzle are there when we are dealing with these cases. So we wanna verify first what years are on file because sometimes when there's a number of years, people get confused, people think the wrong years are, you know, people get the years mixed up, get the periods mixed up, think they may have filed for certain years when they haven't. And then we want to look at what sort of records the IRS has. And there is this really cool policy statement that we are going to dig into today, that the IRS has about what they will consider compliant, which is policy statement p five one thirty three, which is basically that the taxpayer is considered compliant if they file the most recent returns. And the reason being is when you've got somebody that hasn't filed in twenty years, the IRS doesn't hold on to records forever. They purge their system at some point. And they also assume that the taxpayer is not holding on to records forever either. Right? So there's gotta be some hard line definitive point that they'd say, you know what? If somebody can meet this, then bar will consider them caught up. And that's what the policy statement basically does. And we're going to take a a deep dive into that policy statement a little bit later. So first off, we want to get authorized by our client to be able to get their records. And there's two ways that we can do this. Probably the best way in most of our cases is with a form eighty eight twenty one. It's a tax information authorization. This allows us to just get records on behalf of our clients. The other thing, if they maybe have tax issues or something else going on where we're going to be representing them, we might look at using a form twenty eight forty eight power of attorney, which will also give us the access to records. So the cool thing with the eighty eight twenty one is it's not just for licensed people, so you don't have to be an EA, a CPA, or an attorney. If you have a small firm, and you have someone who does your administrative work, somebody unlicensed can be put on an eighty eight twenty one as long as they have a central authorization file number or cap number. They can be placed on an eighty eight twenty one. They can contact the IRS. They can get records. So it's not necessarily strictly for licensed people. But the cool thing once we get these forms is it allows us to contact the IRS and get records on behalf of our client. So we can use the transcript delivery service to get records. We can get stuff through practitioners priority service. And we can, you know, put together the pieces between the different types of transcripts and gather our data so that way we can prepare an accurate return. The other neat thing about this is we can check a box on the eighty eight twenty one where in the future, we're gonna get copies of notices for our clients. So say you put together six years worth of tax returns for your clients to meet the policy statement and some of them have balances. If you check that box, once the returns post in the IRS system, they will send you the CP 14... Copy of the CP 14 letter that the client gets that says, hey. You owe us... We process your return. You owe us this much money with penalties and interest. And with the $88.21, you... You're not allowed to represent. And you can... If you have a client who already has an IRS individual account set up, you can actually file these through the tax per account, which is a great add on that's happened over the last couple years. Now, alternatively, in our cases, we can use a form twenty eight forty eight. If you are going to be stepping in the taxpayer shoes and representing them, you would wanna use this form, but it's only for, like, CPAs, EAs, and attorneys. It still gives us the same authorities as the eight twenty one. We can, you know, get records of IRS transcripts. We can, get copies of future notices. But the additional thing is we can negotiate on their behalf. We can work out resolutions with the IRS. So if there are collection issues that we're working on with them, for our clients, we have that authority with the power of attorney where with the eighty eight twenty one, it's basically just for the tax for us to get the taxpayer's information disclosed to us. So, generally, in these cases, unless there is a reason we are stepping in to represent, say, for example, if they have unfiled returns and they also have some outstanding balances that are in collections. If somebody's just coming into us that hasn't filed in a number of years, what you more than likely wanna do is get an eighty eight twenty one. And normally, like I said earlier, people don't necessarily know what they have going on. So what I what I tend to do is look at using a blanket pop '80 eight twenty one. So for example, I will go back ten years, and then you can also go up to three in the future if you're dealing with collection issues. But that gives me the ability to take a look back and actually see what their compliance history was. So I can see, like, when they stopped filing. We can see if they have any sort of balances, and we can also see if there was periods where they didn't have penalties and they filed prior to us filing because they might qualify for something like the first time penalty abatement. So there... There's a lot of cool things that we can learn about by, you know, looking a little bit further and looking at a little bit broader scope when we do our eighty eight twenty ones. And under our tax matters, what we wanna fill out is, you know, if you're doing it for an individual return or you're gonna fill out the, income tax form ten forty, then your periods are 2015 through 2029, for example, and then not applicable. So that way, it will give you that access to all their records. And, honestly, like I said, sometimes the taxpayers come into us and they're confused about timelines and confused about what years they haven't filed. So this is always a great start to just, you know, go a little bit further and see all the records that the IRS has because we wanna make sure that we have a good understanding of what's going on. Like I said earlier, we wanna list the the tax type. So you have your 10 forties, or your income tax, 10 forties, and then your your span of years. That will actually allow you to get any type of transcript. In practice, I've had people who have, you know, talked to me about power of attorneys and things and... Or eighty eight twenty ones, and they're like, I have all the types of transcripts listed. Like, no. No. No. You don't wanna do that. You just wanna... If you have on there the form ten forty, it's gonna give you the authorization to get account transcripts. It's gonna give you the authorization to get the wage and income transcripts related to that year. So, you don't have to list the transcript types that I'm gonna talk about later. You just wanna list the tax forms that, you know, basically your client's gonna be filing. If you are dealing with someone who is married, you're going to have... And you're potentially looking at filing joint or you're gonna have to look at doing an eighty eight twenty one for the taxpayer and an eighty eight twenty one for the spouse. So that way you can get both sets of wage and income records because those are gonna be based upon the Social Security number, and we're gonna talk about those a little bit later. And if the person has a business with an EIN, if it's a sole proprietorship, it can go on the eighty eight twenty one. But if it's any other sort of business, you're gonna have to have a special eighty eight twenty one for, you know, l l... For if it's an LLC, an s corp, c corp, partnership, those type entities, if you wanna get any sort of records from the IRS relating to them, you're gonna have to fill out fill out a separate eighty eight twenty one or power of attorney. So once we have these authorizations, they're gonna allow us to see the transcripts. And in order to file those authorizations, what you would wanna look at is they can be done a few different ways, and I'm gonna cover that. But the end of goal is to try and get those those account transcripts. Now we can do this... We can, file the eighty eight twenty one through the twenty eight forty eight in a few different manners. The first way is the old way where we, you know, put together the form, we fax it off. There is three different CAF units that process them. There's one in Ogden, one in Memphis, and one in Philadelphia. Ogden and Memphis, they pretty much divide kind of the East and the West of the country. And then, Philadelphia is for people who are international. And on the power of attorney or the 88 or the eighty eight twenty one instructions, it gives you the the fax numbers for those. But there's better ways. What you can do now is there's an online portal on the IRS website for submitting twenty eight forty eights and eighty eight twenty ones. This is the only place where if your client files or, signs with an electronic signature that you can file it. You can't fax in something that's been electronically signed. So if you have that, you wanna do that through the submit twenty eight forty eight or eighty eight twenty one file portal. You can also use ones with wet signatures. Generally, if I've got my client in front of me, I'm gonna recommend that they actually do a wet signature on it so to actually physically sign the form. And the reason being is if I wanna jump into things and get records from somewhere like practitioners priority service or if they've got somebody for collections, like automated collections or revenue officer on their case where I'm gonna have to fax in the power of attorney, I wanna have something with the actual signature because those departments and those other staff cannot take an electronic signature. So I generally recommend having your client's hand sign them. But if your client is tax savvy and they have an individual online account set up with the IRS, the fastest way you can actually get an eighty eight twenty one or a power of attorney through is by using your Tax Pro account. You basically fill out the form online. You can't... Your taxpayer should get an email letting them know something is going on in their account. But generally, I call my clients as well to say, hey. I just finished filling out this eighty eight twenty one. You have to log in to your individual account and authorize the, authorize the form. So they just log in, they go in, they mark off that they're okay with it. And once that's done, you'll have instant access to the records online. If you are faxing or submitting through the portal, you're not gonna get access to the records until the CAF unit has processed them. Now once we have, the power of attorney posted, there's a couple places that we... Or the eighty eight twenty one posted with the CAF unit. There's a couple places that we can get information. Or if you had your client physically sign it where you can fax it in, you can contact practitioners priority service to get the records. They can provide basically any type of transcript. It can be things that are external. These are gonna be the normal ones we're working with, the account transcripts, the wage and income transcripts. But we're also gonna cover a couple internal transcripts that we use... We can use for non filer cases, which can only come from practitioner's priority of service like the IRPTR and the NMOD transcript. Now anything external, they can upload to your IRS eservices the subject... Or the secure object repository, the SLR mailbox that's connected to your account. And if they're internal transcripts, generally, there's stuff on there that have to, like, redact things like the DIP score. So, basically, like, what's the chance for your client being audited. Ted shows up on some of these, so they will have to, like, mark that stuff out and and redact it before they send it over to you. So, generally, those ones are... Anything internal is gonna be either faxed or mailed to the client. So one of the most useful transcript tools that you want to get for individuals is the account transcripts. This is actually gonna let us know whether they're a non filer for that period or not. It will tell you that there's a tax return secured, that there's, tax returns filed. Also, it'll tell you that there's no return filed. If your client did file an extension for that year, it'll show up. If they made any estimated payments or if you're looking back at some of the years where there was a stimulus payments, those records show on the account transcripts. And if your client didn't file their return and the IRS had records for them and went in and filed a return on their behalf. That's called a substitute for return. If the IRS went in and did that, they will show on the account transcripts as well as a substitute for return filing, and then you'll see a return file. But we're gonna talk about SFRs in a little bit and deep dive into those. The other thing that we wanna get for any periods that our client hasn't filed are the wage and income transcripts. These are gonna be based on what was reported under the Social Security number. It's gonna think... Give us things like like w two information. It's going to give us, ten ninety nines, k one information, even the fifty four ninety eight. So, like, what they have in their investment accounts that got reported to the IRS. Those things are on there. And that's why if you're dealing with people who are married and you're potentially looking at filing a joint return, you're gonna have to request these, for each person. So that's why you need an $88.21 for each person. These are only available for the most recent nine years. So that's why, you know, when we were talking about the person that owed twenty years, that's why the IRS kinda have that policy statement. They look back at six, and then there's three because that's how far they could look back as far as audit stuff. That's your assessment statute. So that's why they have nine years. And the thing that I always get questions about with these, the first time people look at them, they see that there's federal withholding, they see the Social Security, the Medicare, and if taxpayer lives in a state that's got state withholding, they're like, well, where do I get that? Unfortunately, it depends on what state your client live... Lives in. So different states have different programs. Some don't have that ability either... Don't have the ability to get the withholding records. So you're gonna have to do a little bit of leg work on, you know, how you get that information depending on what states your client is involved with. But, generally, I kinda use these as a starting point. So that way, at least, I can reach back to my client and say, hey. You worked at ABC company three years ago. Is there any way that you can contact them from your w... For your copy of your w two so we have your state withholding. So sometimes it's just a little bit of using it more or less as a... As kind of an outline and not necessarily, like, the end product of what you're gonna be what you're gonna be filing with. And one more thing on these, if you have a client who is, you know, day trading or doing a lot of stock flipping or going through and selling a lot of crypto, what can potentially happen is there's only a limited amount of transactions that are on there. I believe it's 99. So if they have over a 100, you know, ten ninety nine b's and you're going through and all of a sudden, like, it ends with a ten ninety nine b, there's no there's no wages, there's nothing beyond that, you're gonna have to have your client actually do a little digging and get all their paperwork to you because you don't have the full picture. And, unfortunately, there's no way for us to get the full account... Or the full wage and income transcript. If we're dealing with businesses, we wanna use the account transcripts to see whether they filed or not. That's gonna give us that baseline information. Now the wage and income transcripts are tied to Social Security numbers. But the IRS has an internal transcript, which is similar for businesses. It's an IRPTR transcript. It's... You're only able to get it by calling practitioners priority service, and it will show you what income was reported under that employer identification number. And I added this in because occasionally this happens. You have the client that set up the LLC and it's been years, so they're not sure if, you know, they thought they filed the change to an s corp, but maybe they're still a partnership or maybe they're a corporation and they don't necessarily know what they are. There is an answer for that. It's a transcript. It's called an NMOD. It's an internal transcript that you can request through practitioners priority service, and it... It's gonna show, like, what the IRS has on record for the type of entity and what form they should be filing and then also what the last form they filed was. So, you know, if they hadn't filed for eight years, it'll let you know, hey. This is this is the last time they filed. And this is the only transcript that we are going to actually include on our 8821. So if you're not sure under your tax type and form, you're gonna fill out other and enmod, So that way, you can contact them. Because right now, we wouldn't know whether it's... You're looking for records on an eleven twenty, an eleven twenty s, a ten sixty five. So that's why you would use that, NMod on there. So that way, once you reach them, talk to talk to them, get the copy of the NMod, they will let you know, hey. Your client's a corporation. Then Then you're gonna come back in and do your eighty eight twenty one with the eleven twenty on there and and, and such. So we've got our second poll of the day. Here's the quiz. What transcripts let us know if tax returns were filed or not? Is it the account transcript, the wage and income transcript, the NMOD, or the IRPTR transcripts? Alright. Awesome. I see the answers coming in. So the one we wanna use is the wage and income transcript. That's the one that's gonna let us know whether the tax return has been filed or whether they are still looking for a tax return. So a lot... So getting the stuff from the IRS is basically the first piece of the puzzle because we wanna know what they have access to. The second piece of the puzzle is actually getting the records from the IRR... Or getting the records from the taxpayer. So if they have, by chance, their last tax return they filed, say they haven't filed for two, three years, they have a copy of what they filed last time, that's great because that you at least have the ability to see, hey. Do they have any, any stock loss carry forward? Things like that. But that's not always the case. So sometimes we're always just... We're just kind of starting fresh because they don't have the last thing that was filed. Now we wanna see if they can provide us their w twos, their ten ninety nines, those type records. Like I said earlier, the wage and income records don't show any of the state stuff. So if you have a client with state taxes, you wanna see if they can track down their w twos if possible. The other thing too, like, if your client has a k one, it... On the wage and income records, it shows it shows basically the income side of things. But say they have, you know, deductions subject to QBI, you're not gonna get any of that information on the wage and income transcript. So sometimes we're using them as a blueprint to kind of see what records the taxpayers gotta, like, go and reach out to for third parties or see if they can dig up themselves. You wanna get... If they're looking at, you know, being itemized, your your ten ninety eights for your mortgage interest, your property taxes, any of that stuff. You wanna get, you know, backup of their dependents and and everything for your due diligence requirements, if they're gonna have any credits related to those. If they have a business, you may want to see if you can get the legal documentation to make sure that you're using the proper business structure. And if not, if they have no idea, you can reach out to the IRS and get that EnMod transcript. And for businesses, you might need things like bank statements or records through QuickBooks to help figure out what their income and expenses are. So, occasionally, we have an oh, no taxpayer where they don't have any records. So what do we do? We know they have income, but we don't know. And we kind of see this more with people who are, like, self employed with businesses. But what we wanna do is kind of put the taxpayer to work. And so if there's nothing on the record with the IRS, we're gonna have to basically put the taxpayer into the position of, you know what, you have to come up with everything you can to help us build this side of the puzzle. So whatever, you know, income documentation they have, whatever expense documentation they have, sometimes it's a matter of having them reach out and get bank statements or reach out to their suppliers to see if they can get records and things. And worst case scenario, sometimes we end up having to prepare it based on the best possible estimates, and we're gonna go through that process in a little bit. So things like invoices, receipts, business records are helpful. Bank statements, unfortunately, sometimes the banks don't hold on to them as long as the IRS wants the taxpayer to file their returns. So that could be potentially an issue. Other things that can come up with the bank statements, I've had cases where people, you know, kind of have stuff commingled where their business and their personal are in there. And you kinda have to sort that out with the bank statements, but it at least gives you some sort of starting point to figure out their income. And, if they have any fixed spending, subscriptions, leases, those type things, those expenses can potentially help us. Say, for example, the taxpayer has got a business and they're paying rent every month and they have their lease agreement. And they might not have, necessarily all the records, but at least you have that lease agreement to show, you know, this is what they're paying per month. So there's other things that we can have them reach out for. You know, if they had payroll, have them talk to their payroll company, get their quarterly reports. As far as proving income, if they are in a state where they have to do sales tax filings, sometimes, you know, having them go online, see what was filed, those can potentially help us piece things together. If they had any excise taxes, similarly, those can help us piece some of these some of these things together. And very worst case scenario, one of the positions that we can take is, you know, we're gonna prepare this with our best possible estimates, and we always wanna disclose that it was prepared with the available records. And if you're looking at an individual, sometimes we have to work backwards from their their... Basically, their living position. So we wanna look at their standard of living, what are they paying fixed wise, build in allowances for things like their food, their clothing, that aren't necessarily, you know, fixed bills, but try and work backwards from their lifestyle to figure out roughly about what they are bringing in. Sometimes we're put in the position of having to do that. Other times, if the taxpayers got a business and they don't have a, you know, full picture, they don't have bank... All their bank statements, they can't get them. Sometimes what we end up having to do is working from what they do have and kind of filling the gaps with things like industry standards. And industry standards are, based upon, like, the major companies in the industry. But one good thing is they can help us kind of figure out profit margins sometimes for our clients. Or the other thing that you could potentially do is if they have decent records, you can often use them as a start point. And then, sorry. If they have decent records in the current year, you might be able to use those and extrapolate backwards too. But if not, we might be looking at using industry standards. There's a bunch of different places, you know, that you can find them. It depends on what the taxpayer is doing. But they at least will give us things like their gross the gross, the gross income ratios and stuff. So that way, if you don't have all your cost of goods sold or if you don't have certain things, you might be able to look at those to give you a little bit of guidance. So I've got a example here of a situation where a client doesn't have, all their records. So the client's name is Bob Jalapeno, and he's got Bob's spicy wings and drinks. I'm from Buffalo, so I gotta include wings in here. Right? He's come to prepare some of your, some on file returns. He opened up a restaurant in January 2022. He had no idea, business, on record keeping. So he ran his business exclusively with cash and used personal funds from his retirement to get things started. He put bank deposits into a bank account just to cover payroll, but everything else is with cash. That doesn't sound too great, right, when we're looking at records. So let's try and piece this together. So this guy we had reach out to the sales tax authority because he did report all his income through those. And we were able to get some of his records from places like, like his payroll company, and we've got his lease agreement with his rent. So we have some of the base expenses, but we're missing a lot. Right? The one big thing we're missing is his cost of goods sold. Right? So we can't be selling wings and that... And spicy drinks and not paying anything. Right? So this is where something like an industry standard can come in to help us. These are broken down on a quarterly basis. So, for example, if we look at something like a restaurant industry, we could be looking at these type profit margins, like, roughly about 56 to 53% for that year. So if we have his sales tax reports, which are broken down quarterly, we can take his income, figure out the gross, the cost of goods sold percent... Percentage by working backwards off our gross margin. So our gross margin is gonna be the income minus our cost of goods sold. That's where the gross margin comes in. So we wanna work backwards on that. So we actually want to take the, the cost of goods... Or the gross margin and, figuring out a 100% of the income, kinda subtract it out. So it's gonna be the it's gonna be the opposite of the gross margin, basically. And we're gonna take our income multiplied by the cost of goods sold percentage that we figured out, and then we have cost of goods sold. So in essence, if this person had a $175,000 worth of income, we're looking at roughly $80,000 worth of cost of goods sold. So that's an $80,000 expense that he didn't have, but we were able to put together by using industry standards. And it's something that, you know, he definitely had. And so now instead of looking at a situation where, you know, you barely had any expenses, we're looking at a scenario where this guy lost money his first his first year because of the cost of goods sold percentage based on the industry standard. So that's something that we can use as a tool to help fill in the gaps. But that being said, we're dealing with a situation where there's no record. So if our client was ever audited, we do have a potential defense, which is the Cohen rule. That was a court case from back in the days of, like, vaudeville and, like, I think the twenties and the thirties, of last of the last century. And, ultimately, what happened in the case is the taxpayer didn't keep records. He owned, like, a little, he he was, like, a basically a vaudeville producer and he was paying for things for his actors and actresses, but he didn't keep the records. So he went to court and they're like, there's reason to believe that these things were being paid, but I don't have the information. And the court said, you know what? Based on, you know, the scenario, yeah, we do believe you're paying for housing for the people that are working here and for clothes and for for costumes and for food on your sets and stuff. So, you know, the courts came in and said, you know what? You don't have everything, but we do believe that you do have these expenses. And so that's in essence what the Cohen rule is. So, you know, there is a reason to believe that there's the expense there. However, the records aren't there. So, for example, if your client's audited and they have three rent receipts, but they've been paying rents the whole year, potentially, you could use the Cohen rule to say, listen. You know what? We have these three, but we're missing the other nine. So given the situation that I have, you know, January and December where my client wasn't kicked out and they were continuing to pay their rent, you can... You you know... It's a decent assumption that the rent has been paid every month. So Cohan can be used for things like that. In this case, Cohan doesn't work for any years that there was, like, meals and entertainment and things where you have to basically provide a log or, you know, keep a record of, like, who you met with and the business purpose. So things like auto expenses and travel, those aren't allowed under Callahan either. So sometimes it is better to do the estimates, and other times it's not. If you're looking at a situation where your taxpayer owes a bunch of money even with potential estimates, but they're in a financial position where they can't afford to pay it where you might be looking at something like an offer and compromise, you may be better off looking at the big picture and saying, you know what? Rather than risk a potential audit with records that we don't have, it may be better for us to file with the records that we do have and look at working the collection side of the case and getting you in an offer, getting you in a noncollectible status, or partial pay installment agreement where they're paying what they can afford. And, corporations that are basically, like, not viable, that are defunct, basically, the the employment taxes... Or sorry. The, the the income taxes, those kind of die with the company. So, like, if you have a corporation that files, they owe, and then the company had been shut down years ago, the IRS can't collect individually from from the people who are owners for the corporation tax. But they can collect a portion of employment taxes. So those nine forty ones, they can collect anything that was withheld from the employee's checks from individuals. So just be aware of that. And we've got our third polling question here. If they were... If they, worked but there's no records, does that mean that the taxpayer isn't required to file a return? And we have yes or no here. Right. Looks like everybody's getting this. They should be filing. That's why we gotta kind of work around and figure things out. So now we have their income, and let's talk about getting them caught up with the IRS. So like I said earlier, you know, the IRS doesn't hold those income records forever. They hold the most recent nine years in the wage and income transcript. So they... If you've got somebody who hasn't filed for decades and is delinquent, they realize that they're not... They don't have the records. Your client probably doesn't have the records. So they have a policy statement. It's policy statement p five... One thirty three. Most of your taxpayers are considered compliant if they file their most recent six years. If there is a revenue officer or revenue agent on the case, so basically an auditor or a revenue officer who does collections, and they get an approval from their manager to ask for other years outside of the six years, then you are required to file them. If there is, like, badges of fraud or fraudulent failure to file, in those cases, they're also required to file. But this is policy statement p five one thirty three. It is in the internal revenue manual. Unfortunately, that section of the manual is down right now because they're working on it. But, basically, here's... You know, we're highlighting that, you know, except in instances where there is, you know, failure to file because of... It's willful or there's indicators of fraud. Generally, you're gonna be looking at this six year period. And this is... In part five is where the six years come from. So they're looking at, you know, enforcement of not more than six years, and that's where that managerial approval aspect comes in. So if they want other years that are going back further, they have to ask for that managerial approval. So when we're filing years... Filing returns, I know most of you know this, but on the older people, you're only able to file... You file the most recent three years worth of returns. So some of that stuff, unfortunately, we still have this snail mail out to the IRS. I always recommend sending it certified return receipt. If the taxpayer can afford to send it a small payment, sometimes it's cool to do that because then you can actually see when the IRS is starting to process the return because they will cash the check first. So if you say you have your client send $5.06, and $7 for the returns, Once that check comes in, you know the... You know, once that check for $5 clears, you know the IRS has processed that year. The $6 check clears, you know, they're, like, working on processing that year and stuff. So it gives you a little bit of a heads up of when they're actually between the time that they've received your package and the time that they, like, actually start working on the return. That's a little pro tip there. So if you're filing these late returns and your client has refunds, this is sometimes a heartbreaker. I had a client not too long ago who hadn't filed for six years, was going through a messy divorce, fell off the wagon with his taxes... With his tax taxes and a lot of things going on with his life, and he wanted to get things caught up... Caught back up. And when he came into my office, he hadn't filed, I think for... It was for six or seven years. And when we filed his six years, the first three, he had refunds on, and, unfortunately, he lost them because of the refund statute, because the refunds are only available for the most recent three tax years. Or if, say, for example, they made, they made a payment on an older tax year and it hasn't... And then that was within the last twenty four months, that one would potentially be refunded. But, unfortunately, when it comes to, like, their with checks, that's considered paid as of the original due date of the return. So if you're filing a return from six years ago right now with just withholding and that's the reason they're getting the refund, they're not gonna get it because that... They consider that stuff paid six years ago when it was actually due. So any refunds that are outside of that refund statute expiration date criteria, those are gone. The IRS just keeps them. They don't go to the taxpayer. They don't get credit for it. It's like anything that they owe from them. They're gone. So that's a little bit of a heartbreaker sometimes when you have people come in that, you know, could have filed but lost the refund. If they have refunds and they have tax debts, the IRS is gonna offset them and pay them towards the tax debt. If there's balances due, let your client know they're gonna be subject to penalties and interest. They're gonna be failure to file because the returns are late. It's 5% per month. Five... Basically, 5% of the tax that caps out 25%. Failure to pay is half a percent per month. That's gonna cap out at 25%. And then your interest is... Fluctuates quarterly. As far as s corp's partnerships, there's also penalties based on how many months the k one's been... Not been filed. So if your client's, transcript for account transcript shows a substitute for return, this is something where the IRS is coming in and filing a return on behalf of the taxpayer. So they look at the wage and income records that are available, and they prepare a return based on that. They're usually gonna do it either single or married filing separate. No dependents. You're not... If the person's got a business, they're not gonna get any expenses because the IRS doesn't have those records. So the goal with them is to get the taxpayer to come in and file their return, or the IRS is gonna come in and file the return in the behalf and then just collect on whatever tax the IRS assumes that they owe. So if you're looking at your account transcripts and you see substitute for returns, you may want to, you know, file those returns to correct the issue. This happens a lot of times if you've got somebody with ten ninety nine, income, you know, self employment income, and the IRS is missing the whole picture with all the expenses that they paid. So coming in and filing the actual return will correct that and adjust the tax balance down. So the IRS wants to make sure that they are, you know, spending their time in a good way. So they they, you know, don't wanna file substance before returns where people are getting money back or things like that. They focus on people who are going to owe. They look at the taxpayer's filing history. Like I said, they look at those wage and income records, and then they determine, is it worth us to file a substitute for return? And if it is, they file a, basically, note... As they first off send a CP 2,000 notice, which is... Says, you know, this is what we're based... Well, this is what we're coming up with. And then after that, they're going to file a notice of deficiency, and that's gonna be based... The... Them proposing the assessment. And if it's not responded to, they will come and assess. So the taxpayer can do a few things. If they look at the the notice of deficiency, they say, yep. I owe it. I didn't file. This is right. They can sign off on it and and agree with it. If they, you know, basically disagree with it, there's 90 for them to file a tax court petition to basically refute it. They can come in and usually, those cases will be sent back to, like, a pretrial appeals where you're still dealing with IRS and negotiating and basically providing them records, talking about what's there to get the get the tax properly... The tax return properly filed. Unfortunately, with a subsidy for return, if you have something like a taxpayer who's self employed, this is considered an audit in essence. So your taxpayer is gonna have to provide, like, all those expense records to the IRS. But if the taxpayer doesn't respond, the notice of deficiency doesn't file a tax for a petition, just ignores that the ninety days goes by, the IRS just assumes that it's right, and then they're going to, they're going to, you know, go on and assess the tax in the system. So if there was a situation where the taxpayer didn't sign the SFR, ignore the notice of deficiency, didn't go to tax court or anything, if you find one of these SFRs on York Times records, you can correct it by filing their original return. If they signed it, it basically counts as being, like, a return, and you're gonna have to amend to fix that. If they... As far... Or if the notice deficiency has been sent but there is no tax assessed yet from the substitute for return, you look at your look at your documentation, your notice deficiency. If you're still in that ninety days, you can, you know, look at potential tax court rights for your client, discuss, you know, if they wanna do that, or, you know, take the... Take over and handle the process, like, once everything is pross... Or once the IRS assesses the tax. Now usually, these substitute for returns are a little bit different than actually filing a tax return. The reason being is the IRS coming in and filing a return isn't considered the taxpayer doing it themselves. So it doesn't start the assessment tax... Or the assessment statute. So it doesn't, like, start the period that the IRS can audit. But it does start the collection statute. So the IRS has ten years to collect whatever debt it posts from there. So just so that way you're you're aware of that. And anything from the SFRs, those balances are subject to penalties and interest. And one more thing I wanna hit on before we kind of wrap things up is a fraudulent non filers. These are very, very rare, but sometimes auditors, like, while they're working cases, may potentially come up with scenarios where they think there's potential fraud. They will bring in a fraud technical adviser to review the cases. And fraud can be either civil where, you know, it's just a matter of, you know, handling it at the IRS level, or they could potentially look at criminal in these cases. And what is a big thing? Like, if you're going through an exam and all of a sudden they go quiet, or they stop asking for a return, Those are kind of hints that... These are kind of tactics that they tell the examiners when they're developing a fraud case. So they tell them, you know what? We don't want a copy of the return for... From the from the taxpayer if they think there's a fraudulent non filer. They're not gonna solicit the tax return. They're not going to, you know, give advice to the taxpayer, or talk about the fact that they're investigating fraud. So this is all done on the down low. So if you've got somebody who is a non filer and say there's a revenue officer involved in their case, this is something that they may potentially be, you know, looking at if they believe there's indicators of fraud. Now there's... There has to be certain indicators of fraud for them to look at fraud. They just can't say, you know what? You didn't file, so it's it's definitely fraud. So these are situations where they've had a history of audits and the IRS disallowing the same item over and over. They had, you know, issues with underreporting income or, you know, basically fluffing, basically picking up deductions or expenses that they shouldn't pick up, quest... Large questionable items, or if they're providing, like, false or conflicting testimony to the IRS, that can be issues as well. And there's years that they're, you know, picking up defendant... Dependents that they may or may not be qualified for to try and get, you know, some of those tax credits like EITC. If they are getting conflicting statements from third parties, another one is birth certificate mismatches with their names, and then also, you know, deceased people, Social Security numbers being picked up as dependents, and also, you know, those refundable credits that don't really make sense for them, those are some of the indicators of fraud. And, unfortunately, if you are talking to a person where some of these things kind of start coming up in conversation. If you are a CPA or an EA, you wanna stop that right there. And the reason being is we have a right to privilege. Our privilege is honestly terrible. It only covers, like, it only covers civil matters, and it doesn't cover things related to, like, tax returns. So if your client is actually looked at as somebody who has criminal fraud and you know information on the case, your privilege isn't like attorney client privilege. You can be brought in by the IRS to go testify against your client. So trust your gut. If something doesn't sound right on your first conversation, don't take the case, and don't keep asking for additional information. Have your client say, wait a minute. You know what? I think you may need an attorney. We'll find you a referral. Just so that way you don't know too much and are put in the position of having to, you know, go against a client or a potential client. So things that we can look for is, you know, if you see a lot of additional assessments on the account transcripts, those are tied to audits. So talk to your clients, see what was disallowed, see what was going on, if they remember, you know, what was... What issues were raised in the audits. If you are responding to an SFR, make sure your client can provide the information to document. If you see things that are... The client's got a business and things seem out out of the norm, if they've got, you know, expenses that don't make sense, talk to them. Those questionable items who, you know, wanna get the background on them, and make sure that, you know, they're legitimate business expenses. If you're getting, you know, suspicious forms, you know, the the taxpayer whited out the withholding and all of a sudden now there is a lot more on there, you wanna watch for that kind of stuff. Do your due diligence relating to credits. Watch out for discrepancies and dependents. And I don't mean things like where, you know, mom claims the kid one year and then the other parent claims the other year. Not things like that are divorce, decrease, like, stuff. You wanna look for, you know, other people that are not necessarily family just trying to be jammed under the return, or clients trying to take, you know, potential, potential dependents that have nothing to do with them. So let's keep your ear out for that stuff. And so kind of my final thoughts on this. I want you to make sure that you're checking the IRS records. That's your starting point. There's a lot of great information there, that'll help you kind of piece together the puzzle. Get your client records after that. If your client's got missing records, there's a lot of good resources out there to help. You have things like industry standards to help piece the things together. Most of your cases, as long as they file the most recent six years, they're gonna be considered compliant. If the IRS filed on their behalf, you can generally correct them by filing an original return. And keep an eye out, keep an ear out for those indicators of fraud. So if you're looking for more free resources, we have the education resource center. There's a bunch of products on there like live and recorded webinars, virtual conferences, self paced modules, and other important articles. And there's also the tax pro center where you can read some articles about trending things around the industry. We also have a support and community. So you can go to the Intuit account and support, through accountants.intuit.comsupportpn--us. You can get some answers about different products and then, you know, search... Get access and search direct... Through directly through, program guides and resources. And our... The community has some different products and workflow recommendations for you out there. So you can you can also connect with experts and professionals to, you know, get some of the answers that you need through the community. And our final poll alright. Looks like we have all the polling questions there. So I just wanna wrap up by saying thank you for your time. I hope you enjoyed the presentation. And the biggest thing I want you to take out of this is remember that IRS policy statement. You know, somebody comes in, hasn't filed for twenty years, doesn't have the records, there's always that policy statement of, you know, just getting them caught up with the most recent six years. That'll that'll help, you know, deal with some of the stress that they have going on. Alright. Take care, and good seeing you. Bye. Hi. I'm Kevin Reinhard, a solution specialist here at Intuit, and I wanted to do a quick overview of Intuit ProConnect. Intuit ProConnect delivers all the tools that forward thinking firms need to drive productivity and profitability with a direct connection to QuickBooks online data that syncs right right to a tax return, tax advisory, document collection, electronic signatures, tax transcripts, and more, everything's in one place. So with ProConnect, you can eliminate five to six different apps that you might be using today that don't work together all under one platform. So I'm gonna bring up the program and share it with you, and let me go to the next slide. This is where we actually are gonna go ahead and share out the program, and I'm just gonna take about ten minutes to show you around the platform that we call ProConnect. So I'm gonna go ahead and stop sharing. I'll go ahead and share my screen, and we'll start with the actual platform ProConnect is... Which is what you're seeing on your screen. So as I mentioned, there are many tools all built into one application. If you look on the left hand side of our program screen, you see all the different components of ProConnect. When we open it, we put you directly in tax returns. So this area here is where you'll do all of your tax returns, get electronic signature. There's all those things you do around returns. We also have our e file dashboard on the left. That's where you track all the progress of your e file returns. Intuit link is our portal. That's where our clients use to send requests to their clients so that clients can upload documents, answer questions, and even sign an engagement letter. Tax advisory also built into the left hand side, that's where you can run an AI generated tax plan for a client. And then we also have a link out to the QuickBooks accountant suite. You may know that today as QuickBooks online accountant. We are renaming that to Intuit accountant suite, and I will show you how to get data out of, a QuickBooks account and have it seamlessly flow to someone's return. So that's kind of the, the overall navigation of the main screen. The tax return section is fairly straightforward. We show you all the clients that you have in the current year. You'll notice it says 2025. If I wanna do a prior year return, all I do is click 2024, and the 2024 app comes up with my prior year client. So it's real easy to switch. The other capability that people like is that you can open as many returns as you want in ProConnect simultaneously. You could have a twenty twenty five individual open, a partnership, corporate, even the prior year open all at the same time, so there's no limit on that at all. Now the other thing that's really helpful across the top of the tax return screen is our ability to filter your client list depending on what you wanna see. So if I wanna see my client's e file progress, you notice how the boxes change? It'll tell me whether or not I have any rejected returns, who's been sent, who's been accepted. So if you happen to have a rejection, just click the box and down here, out of all the returns you do, you will only see those returns that may have been rejected. We also do that for electronic signatures to let you know if someone has declined, if they failed to authenticate, how many are done. We also do it via feature called return status. You're able to mark statuses of returns down here, and then we'll tell you how many clients you have in each one of those custom statuses. So that's kind of the main screen around tax. Let me open up a return real quick, and I'll show you the tax workflow. John Taxpayer is our client. This is where we click to open a return. We've tried to keep the the tax part of this really, really simple for you. There are three buttons at the top. We have an input return button. That's where all the data is entered. We have a check return button. That's where you'll see their tax forms, and that's where you can check out the diagnostics. And then the final button is file return, and that's where you can e file it, get a signature, print it. That's where that functions... Those functions are located. Input is based on a category system. So if you look on the left hand side, we happen to be in a ten forty return. So these are all of the categories of a ten forty return. So, you know, if you wanna enter income, you just go over the income section, expand it, and you see the wages, the interest, the dividends down here, schedule c's and rental properties. If you wanna add a dependent, that would be under a section called general where we have the client information screen, dependents, if you wanna put banking information in. So just think in terms of category. You have deductions, you wanna enter assets, adjustments to income, which would be like an IRA or a SEP, things like that. So that's how simple it is to navigate. Now once we're done with that, we go to check return, and this is where I said, you see a two year federal comparison. On the left are your tax forms for the federal and all the states. So if you click federal, here are all the forms and schedules as well as all the tax forms for this client. One nice feature in this area is when you open a form, you'll see that all the fields are shaded in blue. It means as the preparer, you can click on any field like qualified dividends and see where exactly that data was entered. So if I click 7,000, it opens up a box and says, here's all my dividends, here are all my k ones, and here are the amounts that are flowing to that line from those various inputs. So it really helps review returns very, very quickly. Next is the diagnostic section. You have critical diagnostics and you have suggestions. The critical diagnostics are the ones that need to be fixed because those will stop the return from being efile. Identification number is missing on the first w two. We just bring you the EIN field and you just fill it out, and that will eliminate that critical diagnostic. And then the suggestions are not problems. They're just things we want you to know that are happening in the return in in terms of tax calculation. So one here says the American Opportunity Credit was disallowed because their AGI exceeded 180,000. So that's what you do there. And finally, the last piece is the file return section. This is where all the returns are set are set up to e file. You can go ahead and e file it here or you can add it to batch e file and put it in a list. So later on, whoever does all of your e filing, once they get signatures, they'll know these are the returns that can be sent. Electronic signatures are found on the left hand side under esignature, client authorization esignature. So that is a super high level look at the tax. Now let's talk about the portal section. Intuit link on the left hand side. The way that you send requests is all built in. You go to the button and say create new request. I'm gonna send a request to a client named Brad Hall. Click continue. Now the program will ask you to pick a template. Because Brad is a ten forty client, we have one called the ten forty default personal tax organizer. Engagement letters, questions, and documents are gonna be sent to the client right away. The document checklist is personalized based on what the client had in their prior year return. So it's not just gonna say upload all your documents, it's gonna give them a list and they can go ahead and either take photos of things, they can scan documents, they can even link out to their bank or brokerage account to pull documents directly from those. That's how we send a request. Now let's take you back into the return one more time because I wanna show you where all of this information from the portal comes back into ProConnect. When you're in a return, go to the right hand side. There's a tax organizer button. Select that. And here's everything John did on the portal. He signed his engagement letter. Here are all the answers to his personal questionnaire, and here are all the documents uploaded based on the prior year requests, e trade, mortgage interest, and so on. You notice how these, these documents have an import button next to them? That's really the advantage of your clients using the portal. You can click import. Using AI, we can read the data on the document. You can say, hey. I wanna add a new one or apply it to two preexisting w twos. Hit continue. We show you what we are about to extract so you're able to review the numbers against the original then hit import. So we have this AI based extraction tool that will automatically create a brand new w two right next to the Intuit w two or Intel w two that I had earlier. So one of the advantages of of using the portal is the AI based extraction tool and placing that data directly into the return. Next thing I wanna talk about is tax advisory. So let me go ahead and share this. Now this feature, I'm already in a tax advisory tax plan. I imported the data from the return for this client. There are four buttons that you use at the top. The second button is where you build your strategies or where you where you build your tax plan. See the button on the left that says insights 20? We're telling you using AI that we found 20 tax planning opportunities in this return to eliminate you from having to do that investigation. So first section called entity selection, you could do s corp choice of entity. Second section is called income shifting. You can hire your kids, capital gain timing. We're telling you all of the items that are available. If you'd like to add something to your plan, hit the add button. What that does, it ships it into the middle section where I've already added bunching itemized deductions, four zero one k's, and health care flexible spending accounts. Now where do you make the adjustment for the following year? Right in the middle column, 2026 strategy change. I put in $20,750 of four zero one k and using this client's marginal federal and state tax rates, we show the savings of exactly $6,495. So you add the items, you make their adjustment, we tell you what the total savings is here and what the net out of pocket is for the client. Lastly, you can also go to the top and create two client reports. The first one is a proposal. This is for the client who's undecided whether or not they wanna pay you for a tax plan. K? It will not say Intuit on your reports. I went up to the top right, hit report settings, and I uploaded an Intuit logo. You can change all the color themes. But the proposal will tell your client that if they do nothing, these are what they're gonna anticipate for balances next year. If they implement all your strategies, these are the new balances and this is how much they'll save. Then you can go over to the tax plan and it has many of the similar documents, but it starts with a really professional cover page, the table of contents. It breaks down the no action with strategies. Down here, it shows all the strategies on a single page. This one shows strategy change, net out of pocket, and tax savings. And I have three strategies in my plan, so we create another section for your client called more about your strategies where they can see they can read up on the different strategies. You may have explained it, but maybe they forgot what you said so you can... They can kinda read up on that. So that's again built in to ProConnect. No additional cost. You have the strategies. Finally, I wanna open up the next... So next and last section, and that is, right now, I am in QuickBooks online, and I am within a company file for Velocity Innovations. So if you'd like to take this data and sync it to a return, you go to the left to the all apps button and select business tax and the feature is called prep for taxes. What we're gonna do is put you in a section called tax mapping. All of the accounts in QuickBooks are listed here. All of the tax lines are listed here. We map many of these things automatically. That's the benefit. But there will be some things that you will need to map in the initial year. Once mapping is complete, you go to the top, you say tax options, update existing return. We already know it's being linked to Velocity Innovations s corp return. Hit update, the data flows directly into their ProConnect tax return. Alright? So, again, super fast. I'm gonna go ahead and go back to, give me one sec here. And I'm gonna go back to another slide here real quick. In this slide, I just wanted to cover really quickly how do we price this product. We have all these great components. How does it price? The basic idea is you buy returns from us. And the more returns that you purchase, the lower the per return cost. Right? So that includes the following. So $10.40 in business returns are are... All of the states are included, federal and unlimited states, the tax adviser, Intuit sign, which is our document system, the portal, IRS transcripts, document import, and the prep for taxes. So it is very streamlined. Once you know your per return cost, you know what your fees are going to be in that year. So next, I'm gonna ask one polling question and based on my speedy and rapid, presentation of ProConnect, would you like a personalized sales demo or consultation about what you've learned in today's training event? So yes, please contact me or no, not at this time. And I'll give it about a minute and let everybody click. Alright. So give it about another thirty seconds or so. And then once we get down to ten seconds, I'll do a little countdown so you'll know that I'm completing the poll. And I'll do that now from five, four, three, two, and one. Final slide in this quick demo is a big thank you for watching. If you would like to do... Have a free trial or use this program, we make a tree... A free trial available to you. If you'd like to get a trial or get pricing, I've also given you a number to to speak to one of our consultants, which is (833) 393-9447, or you could just go to Google and type in ProConnect tax free trial, and the link will come up to try it out. Thanks very much for your time, everyone. I hope you enjoyed it.