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If his return gets filed and the Income is less than the total of the 1099's. He will be underreporting his income and will get a CP2000. If it is a latge amount with penalties, etc., guess who he is going to blame? With clients like this, I will get IRS income transcripts, and also add up the deposits from their bank statements. He doesn't have to go back to his clients. When people start avoiding things, I begin to get suspicious. Never let the client dictate what you need for the return.

To our friends in Louisiana: Stay safe with the storm, the ridiculous amounts of rain, and the storm surge!

Thank you

If you're at all suspicious about his "tossed" 1099s, then make sure you keep/scan/whatever mode his P&L or his written/emailed statement of income received so you have documentation that he told you his revenues were $ X, just in case he gets that CP2000 a couple years from now. If he's sitting at your desk and saying his income was $ X, hand him paper and pen to write it down "for your file."

When I saw the guy in the tub with the whiskey bottle, I though I recognized him. And now I remember. His name is Duncan Disorderly.

Amen!

The other piece is depreciation on any assets bought during the "missing" years. If the corporation is in a position to Section179 everything - or if they didn't buy anything that qualifies as an asset during those years - then if your client can confirm through the SOS's office that the corporation still exists, go for it. Many times, too, you can reinstate a corporation by filing all the back annual reports and paying the fees (plus a sweetener, frequently called a reinstatement fee). Else he has to open a new corporation, get a new EIN, and he can kiss this particular loan goodbye and try again once his paperwork is in order, in two or three years. Of course, no one is going to loan money to a brand-new corporation with zero history... You can't save some people from themselves and it's NOT our job to try.

Thanks for both replies. I was under the impression that 1099 Misc forms were entered on the Schedule C and that the IRS was looking to match those within their system. Obviously, my understanding was incorrect and you do not need to enter each 1099 you receive, as long as the total income is greater than the total of the 1099's. Thanks again!

I don't think the IRS will be a problem. The first year that penlties were applied for non-filing was 2015, so I think 2014 would have had to been filed in order to flag 2015. A larger problem, but not yours, is that your client didn't file an annual report(s) with the SOS, which is required to keep it in good standing. The SOS maintans an on-line list with each corporation's status. If the corp is not in good standing, the bank might deny the loan and/or put more honerous conditions on the loan. Ir is also possible that the corp has ben suspended. Suspended corp contracts are null and void.

If you are in this business and don't have a sense of humor, things can get pretty frustrating.

Gail, et al, the wife minister's W-2 was entered as spouse and Special type, clergy. The 1040 Clergy worksheets were completed. Husband, filer, had $325 non-employee compensation. Somehow, the SE created was short form for filer and should have been long for for spouse. The amount of SE tax was actually almost correctly calculated, off by just $15. I can't easily find out why but it was in their favor. The remaining issue is that the SE tax was reported for filer, husband, and not spouse, minister wife. So I will still pursue the path Max recommended as the tax difference is less than $50 and we just need to be sure she gets the proper credit. Thanks again, all, for great guidance! What a group of fine professionals on this board...

Kimjo, I appreciate your response. All is forgiven.

Thanks for the opinion, humor and admonishment, Max. I will eat the humble pie,and I will Like it! No disrespect intended

I'd do a fresh install. It will run better.

I've still got a postcard-size promotional piece for "Textellent" that I picked up at last year's National Tax Forum vendors' hall, alleging that it's good for "tax pros." www.textellent.com is its website. Just haven't had the spare fraction of an hour to really research it.

About 10 years ago Oregon had a tax amnesty. I prepared 11 years of regular corporate returns . My client filed the state returns and did not file the federal returns. My client paid Oregon the corporate tax due plus 1/2 of the interest. The state waived all penalties and 1/2 of the interest. The next year I prepared and my client filed both federal and state corporate returns, which we have done every year since then. To my surprise, my client has never received any letters from the IRS about the missing 11 years of Form 1120.

Gail makes a good point. If there is a change in the amount of tax, then the return should be amended. Then, the client would have to follow up on a later date, probably in 2021, to see if the correct changes took place.