no K-1 but wants to file??

[WITAXLADY]

so client works and received checks as partner - (sort of but that is another issue! )

company doesn't file anything! but he wants to do his taxes - he knows how much he received, and based on last year - there should be at least 50% of that as loss again - can he file like that? just to get it done? main person has pretty much skipped town - altho I see the signif other still working at a local business but the IRS cannot find the main partner..

suggestions? He will have to pay in and wants to do some at least? Is there such thing as a substitute K-1? And the business has changed names and EIN so I do not knoe if I have that info on file - but then if I make up a K-1 -  I feel I am committing fraud!

D

[Catherine]

If YOU make up a K-1, then it's fraud.  

His income you can accept from him - and if *he* nets out the "partnership" loss it's on him.  But you should get that information from him in writing, not verbally.  But other than his written statement, you have nothing to go on.  I'd put it on Sch C (subject to SE tax) as a guaranteed-payment-equivalent, and put in a disclosure statement stating this is the best that can be done because the tax matters partner has disappeared - and give whatever names and EIN's exist.

This is one of the tough ones; the client wantst to file, can't because of other people - what do *we* do?  Sometimes the best you can do is the best you can do.  But still cya, get all info from the client, and disclose the bejezus out of it all.

[Roberts]

JMO, I'd call up the practitioner hotline and ask them how they want you to proceed.

 

[Catherine]

8 minutes ago, Roberts said:

call up the practitioner hotline and ask them

Excellent advice!

[RitaB]

It's a slow day, so I'll ask:  Am I the only one who would rather do a tax return than call IRS?  Call anybody, actually.  I'd rather compose a letter to IRS than call them, too.  (This comment is not meant to disparage the advice to call PPS.  It sounds like a good idea.)

In the interest of full disclosure, I would also rather risk cutting off all circulation in my arms by carrying in all the groceries at once rather than making another trip to the car.

[Max W]

Just because the client didn't receive a K-1 doesn't mean there isn't one.  The first thing I would do is pull the Income transcripts for that year.  It is always possible that the 1065 was filed, but the TMP didn't bother to send out the K-1's.  I'd also try to get a transcript of the 1065.

If no K-1, I prefer reporting  netting the income on Line 21 with any SE tax going on to the SE form.  However, be careful that the client's partnership basis is not exceeded by the losses.