how many years to file 1040x/8891 for? bad accountant advic

candleberry · Post by **candleberry** » Mon Apr 07, 2008 7:32 pm

I'm getting what I think is not good advice from my accountant on backfiling 8891s. I have read in many threads on this site to go back 6 years. She is telling me that you can only revise taxes back to 2004, that all IRS records are closed. Until I brought it to her attention, she had no idea what 8891 was (not surprising, we are a long way from Canada here and I'm sure we are her only Cdn clients). Her other concern is that filing the 1040x extends the limit on how long the IRS can possibly consider files for auditing. My perspective is that filing 8891 for 2007 and not for any previous years gives them plenty of incentive to audit on its own! We had previously been sending in a list of the Cdn RRSP accounts, but not declaring tax deferment (this was her instruction). In her eyes, this is enough. I find that hard to believe.

So is this true about being unable to file previous to 2004 at this point? Sorry, the whole thing just doesn't make sense the way the accountant is looking at it compared to what I am reading on this forum.

nelsona · Post by **nelsona** » Mon Apr 07, 2008 8:21 pm

6 years. Your reasoning is accurate. Once they find an error, they can go back 6 years anyways.

She is in over her head.

JohnSt · Post by **JohnSt** » Tue Apr 08, 2008 7:22 am

Concerning filing the amended return, my understanding is that filing an amended return does not affect the original three-year statute of limitations: http://www.taxlawcenter.com/g0076000.htm (presumably, unless you expose 25% of undeclared income or give some other reason to justify a six-year review).

candleberry · Post by **candleberry** » Tue Apr 08, 2008 9:09 am

Nelsona, thanks for your reply. As always, you are extremely helpful and greatly appreciated.

JohnSt, *that* info is also very worth knowing! It pretty much takes away any argument against filing.