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You said yourself that you are working with incomplete information. That leads me to believe that the bank statements are not the only source documents (I could be wrong, just my hunch). I would hesitate to amend returns that I am not sure I have all the data and documentation for. How would you defend it if the IRS decided to audit the returns? What I would do, if you want to keep the client, is ask the client to give you a letter indicating that I can rely on the work of the prior accountant. Get the prior year financials and returns, make your prior year financials look like the reported financials and returns and move forward with your work in the current and future years. I hate these situations, but I caution you about making it worse unless you are absolutely certain you have all the source documents to make any changes. Tom Longview, TX

i have been through this several times, and because of it, I do not get involved in management or reporting any longer, not even the group we are personally involved with (volunteer). My suggestion is to consider setting up a new entity and let the old one die off. With the litigation and other issues which may yet to surface, keep clean of that end. It may well be the old entity has no assets or is allowed to transfer to a successor or similar. My first one was a club which had done events and fundraising since at least the 1930's. Somewhere in the 70's, the members ignored any paperwork and reporting. I came along on the 80's. The issue for me, was the events were causing significant liability to those putting on the event, and I insisted on doing things correctly. That is when the issues were discovered, counsel retained, and the start clean advice was given and taken to heart.

Please, folks, try to stay on the topic and remember that the original poster is a tax preparer awaiting an answer to solve his or her problem in order to finish a project or return, and it is not helpful to that person to receive answers that derail topics sideways into other areas with anecdotal stories. If you don't have the technical answer, that's OK, please scroll on by and hopefully someone else will chime in with the answer. If a topic or post jogs a memory or brings a related question to mind, that's OK too, but PLEASE START A SEPARATE TOPIC. If you take the time to read your typed response before clicking "submit" and the post swerves off course with something that sounds like "this reminds me of when my spouse's second cousin's brother's wife's stepchild once removed brushed her pet rabbit..." then please rethink your answer. Obviously, this doesn't apply to the occasional nontax-related topics that are posted in fun.

Did not think of that one. It may or may not be feasible but it is worth exploring the idea. Tom Longview, TX

Daughter needs to give you the short certificate that designates her as executor to act on behalf of estate, or the court appointment if she doesn't have the short certificate. You know POA died with the mom, so once daughter gives you whichever document grants her the authority to act on behalf of the estate, only then will you be able to work with her again on behalf of mom and mom's estate. At that point, you could choose to have her sign a release to provide copies of returns directly to attorney, if you are comfortable with that. Otherwise if not, you will provide daughter with extra copies that she will provide to attorney herself. I don't see how you could possibly provide either of them anything today since those returns are not yet completed. Sorry, can't answer about the paper vs e-filing. Depends on what document you get. Check instructions for form 1310. There was an extensive discussion a couple of months ago on here. I'm not in office right now or I'd look it up for you. Maybe later tonight I'll have time to revisit this discussion.

The joint extension covers both taxpayer and spouse no matter whether they file MFJ or MFS. It will be fine.

Please don't take this discussion to contract "employee" that SHOULD be payroll instead of 1099 reporting. Plenty of small businesses and rental owners pay contractors and attorneys that require 1099s to be issued that have nothing to do with being on payroll at all!

Easy if no significant assets or if solid end of life transfer terms in place.

Depending on the legalities, there may be no formal admin or executor. There may be what will often be called a small estate, where the heir(s) can do things without court involvement. Since the OP mentioned an estate attorney, then it would be wait for court doc showing admin or executor powers. Took me about 60 days to get those the last formal estate I was part of.

My bad. He has filed an extension due October 15th. apparently for MFJ but they now want to file MFS before the deadline. Having filed the extension for MFJ are they now prohibited from using the MFS filing status even though neither has yet filed their returns ?

From TTB WebLibrary: Amending joint/separate returns. Spouses can amend separate returns to file jointly. Once a joint return is filed, taxpayers cannot choose to file separate returns after the due date of the return. Exception: A personal representative can choose to file a separate return for a deceased spouse up to one year from the due date of the return.

Ah, glad to have helped solve the puzzle.

@jklcpa You're a genius! Yes there is! For anyone looking for this in the future, the rabbit hole map is: 1120S, pg 4, 17d (yes the greyed out field) and JUMP to Linked Field which takes you to: Line 17d, Sch K (1120S) - Other Items & Amts. Scroll to AC, and click the JUMP to Linked Field which takes you to: Line 13 (1120S) - Interest Expense. Depending on how you answer the schedule B question, the "IRS Sec 448 Gross Receipts Test equation is explained. For the record, it's the preceeding three year average fo gross receipts OR the CY gross receipts. Thank you @jklcpa !!

Mod note: 2 posts hidden as O/T. Please stick to the OP's topic of 1099 reporting and if non-issuance makes that expenditure nondeductible for tax purposes. Anyone wanting to discuss accepting or paying for services in cash/check v. plastic or any other side issue should start a separate topic of its own.