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Unfiled returns and IRS audit (1 viewing) (1) Guest
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TOPIC: Unfiled returns and IRS audit
#7241
tbm1231 (User)
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Unfiled returns and IRS audit 7 Years ago Karma: 0  
Client is under audit and the same client is filing bankruptcy. Client is under audit for his 07 return which was filed timely. Problem is that the 07 return didnt include a K-1 from another business which the Client owned. To make matters worse, the information needed to prepare the k-1 and the corresponding 1065 was shredded. So, if i get an assessment from the IRS, I can likely get the Client's 07 into the bankruptcy, but i cant get the k-1. Also, if the IRS decides to audit 08 & 09, i cant get those into the bankruptcy. Are there any issues with the missing 07 K-1 which will impact the Client or his bankruptcy? I feel like i am missing something.
 
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steve (Admin)
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Re:Unfiled returns and IRS audit 7 Years ago Karma: 3  
The BK will only apply to the known IRS deficiency for the years outside of the statute. I would have the client prepare a return for the company based on bank statements and 1099 and whatever expenses you can substantiate and get it in the BK. Were records destroyed for 08 & 09 too or just for 07?

Talk with the BK attorney and make sure they are on notice that the tax returns are incomplete and missing a K-1.
 
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Miami LS (User)
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Re:Unfiled returns and IRS audit 6 Years, 12 Months ago Karma: 0  
We dont have records for 07, 08 or 09. Thats the problem. The IRS will assess on all these yrs. It may be possible to discharge the 07 under the BK, but the 08 & 09 will assess high (due to the lack of records) and then remain as a black cloud over the taxpayer's head for the next 10 yrs. Doesnt sound like there are many options?
 
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