Question on filing taxes

Russ Smith · January 23rd, 2010, 03:50 PM

A friend didn't work all of 09 and wasn't eligible for unemployment so she had zero income, no interest income nothing. I went ahead and started a return on Turbo tax for her and it went through the whole thing including the personal exemption (3650) and standard deduction (5700) and came up with a return of $0 Federal and $0 State. I haven't completed it I still have to do the "wrapup" tab and the print and file tab but it appears that even with those exemptions because she paid no taxes on no income there is no return. She had hoped there was some carry forward loss or stock stuff but there isn't.

Does she HAVE to file? Is there any advantage to filing or not filing? I'm only asking because if I go much further she'll then have to pay for filing, which while not very much is still money out of pocket and when she's not working if she doesn't HAVE to pay it she won't want to.

jefftheshark · January 23rd, 2010, 04:17 PM

Quote:

Originally Posted by Russ Smith

A friend didn't work all of 09 and wasn't eligible for unemployment so she had zero income, no interest income nothing. I went ahead and started a return on Turbo tax for her and it went through the whole thing including the personal exemption (3650) and standard deduction (5700) and came up with a return of $0 Federal and $0 State. I haven't completed it I still have to do the "wrapup" tab and the print and file tab but it appears that even with those exemptions because she paid no taxes on no income there is no return. She had hoped there was some carry forward loss or stock stuff but there isn't.

Does she HAVE to file? Is there any advantage to filing or not filing? I'm only asking because if I go much further she'll then have to pay for filing, which while not very much is still money out of pocket and when she's not working if she doesn't HAVE to pay it she won't want to.

If she has no income, then she doesn't have to file.

But the danger is that this probably won't pass the IRS's sniff test (how does she pay her bills?). She should probably be prepared to answer some questions such as "is she living off of savings, or supported by parents, etc.?" if she's filed before and then doesn't file, and then the IRS flags her for an audit.

However, if she has credit cards, or a mortgage, then she needs to aware that the IRS can get documents from other sources that indicate that she has money, and that can trigger some flags also.

JTS

jw7 · January 23rd, 2010, 04:19 PM

Hey Russ,

At first glance, I would say no, but don't take a message board reply as legal advice.

Here is a link that might help: IRS Who must file has a walkthru with questions.

That said, me and the IRS are buddies because they have challenged my returns twice, and are just idiots that can't do math.

On a side note, this is awesome: IRS Chief can't do his own taxes because it is too complex:

Russ Smith · January 23rd, 2010, 05:15 PM

Quote:

Originally Posted by jw7

Hey Russ,

At first glance, I would say no, but don't take a message board reply as legal advice.

Here is a link that might help: IRS Who must file has a walkthru with questions.

That said, me and the IRS are buddies because they have challenged my returns twice, and are just idiots that can't do math.

On a side note, this is awesome: IRS Chief can't do his own taxes because it is too complex:

Thanks. I also did the community on Turbo Tax' site and I was advised there to tell her not to file. In fact they said the IRS would prefer she not file because they don't like to have to process returns with no payment or payout involved.

My main concern was what Jeff said, does not filing create a let's audit her situation.