If a taxpayer has not filed 8606's for non deductible contributions made in several prior years, and receives a distribution from the non deductible IRA in tax year 2007, is it advisable to file the form
8606's now?The 1040 for year 2007 has still not been filed, but I am thinking it may be possible that the 8606's may not post with IRS even if we send them now, and the 1040 is not sent until 10/15.
Oct 15 is the last date to file and I suggest not missing that date.
So file your 2006 Form 8606 now, it is standalone so you need not file an amended tax return, and whether or not they can process it in time, file your form 1040 for 3007 including the 8606.
In theory there is a late filing penalty for the 8606 but I've never heard of the IRS imposing that penalty.
For your own records save the last 8606 you filed -- pretty much always. An 8606 is a cumulative form, and only the last one is needed for a future year.
Form 8606 for prior years will be accepted by the IRS even if more than 3 years have elapsed. The 8606 may be sent by itself (no need to amend or attach any tax return). Just be sure you sign the form on page 2 and that your basis is properly identified on each 8606 that is subsequent to a prior year. The IRS has the right under Sec. 6693(b)(2) to fine you $50 for each late filing year. I have yet to hear from anyone that the IRS has done this.
I recommend that you also include the 2007 Form 8606 with the prior years' submission. File your 2007 tax return under the assumption that the 8606 forms have been submitted and accepted.
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