MsTabbyKats Posted February 3, 2015 Report Share Posted February 3, 2015 I have this client....J visa issue Last year he was a major PITA...and because of all of our correspondence, I became fond of him (Think Sheldon..."Big Bang Theory") Client was exempt for tax for 2 years....under the condition that he return home after 2 years. Client overstayed his visa (this is very common). The problem is that his W-2 and 1042-S, when put together, clearly indicate that he was here for more than 2 years. No matter how I do the return..what I include...what I exclude...the data is being sent to IRS from his university....and when all the puzzle pieces fall into place...he will have to pay the back tax. (That is...if the computers are doing their job.) I really don't want to do the return...because, as I said, no matter how I do it...the IRS will have all the data...and I don't want to be held responsible (please note...I don't mean the IRS holding me responsible....I mean the client holding me responsible) when they ask him for the tax. I'm on the verge of telling him that he needs a second opinion from someone less experienced than me...who won't see all of these potential problems. Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 3, 2015 Report Share Posted February 3, 2015 Nope; he needs one of two things. 1. A serious come-to-Jesus talk from you about how HE overstayed, so now HE owes back taxes and that's the cost of over-staying, or 2. A referral to someone with MUCH MORE experience, who might know legal and ethical ways to deal with this. 2 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 3, 2015 Author Report Share Posted February 3, 2015 Nope; he needs one of two things. 1. A serious come-to-Jesus talk from you about how HE overstayed, so now HE owes back taxes and that's the cost of over-staying, or 2. A referral to someone with MUCH MORE experience, who might know legal and ethical ways to deal with this. Someone with more experience would tell him exactly what I told him. (Not sure if there are many people with much more experience...I'm considered "the expert" on J/F treaties.) I would be happy if he told me he wanted another opinion. Someone with less would "just do the return"...oblivioius to the consequences. I'm not really expecting any solutions here.....just maybe a nice way to say "I think you should get a 2nd opinion". BTW...this guy as my #1 2014 PITA. I even offered him his money back a couple of months ago. Just some sympathy about how frazzling dealing with these PhDs in rocket science can be..... Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 3, 2015 Report Share Posted February 3, 2015 If you prepare this return, prepare it correctly with the data you are given and have knowledge of, not however you can best finagle it to hide what really happened with his overstaying his visa. That is your job. You should also explain in writing that he caused this problem by overstaying, and also compute the potential tax impact of that inaction on his part so that you've made him aware and put the responsibility back on him. That gets you off the hook for any blame that he may try to place later and tries to hold you responsible for the interest and penalties that will be assessed. Once you show him the impact on those back taxes, suggest that he amend to get ahead of this, but the choice of amending or waiting to see if this is caught should be his. You can't force someone to amend a return. 4 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 3, 2015 Author Report Share Posted February 3, 2015 If you prepare this return, prepare it correctly with the data you are given and have knowledge of, not however you can best finagle it to hide what really happened with his overstaying his visa. That is your job. You should also explain in writing that he caused this problem by overstaying, and also compute the potential tax impact of that inaction on his part so that you've made him aware and put the responsibility back on him. That gets you off the hook for any blame that he may try to place later and tries to hold you responsible for the interest and penalties that will be assessed. Once you show him the impact on those back taxes, suggest that he amend to get ahead of this, but the choice of amending or waiting to see if this is caught should be his. You can't force someone to amend a return. Thanks...I appreciate the advice. I've already spent too much time on this return (working on it...and complaining about it to DH) to start making calculations about penalties. The more I think about it....the more I want to "cut him loose". On top of all this....he needs to apply for an ITIN for his child. Quote Link to comment Share on other sites More sharing options...
easytax Posted February 3, 2015 Report Share Posted February 3, 2015 Can not speak to the tax aspect but knowing a bit about you from your posts, says you will do what is legally and morally correct. The "feeling bad" on your part is unwarranted --- he knew the requirements about the two years and CHOSE to stay. If he has problems with that, that is not you --- that is was his choice and is between him and the country. Feel proud and well that you are giving him good council ---- regardless of his bad decisions. 4 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 3, 2015 Report Share Posted February 3, 2015 Ms Tabby, I hear you loud and clear about not wanting to be any more involved or waste more time. If you do cut him loose, I would at a minimum write him a letter making him aware that because he overstayed, that taxes may be assessed on those prior years. If you don't want to run those calculations, at least make the situation known to him so to put that responsibility back to him, not on you for not making him aware. 3 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 3, 2015 Report Share Posted February 3, 2015 I didn't mean to imply that you don't have the right experience; I was suggesting someone with a specialty so that when he received the same counsel he could not fluff it off since it will not be to his liking. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 3, 2015 Author Report Share Posted February 3, 2015 I didn't mean to imply that you don't have the right experience; I was suggesting someone with a specialty so that when he received the same counsel he could not fluff it off since it will not be to his liking. Oh...OK...and a good idea. I got so busy I put him out of my mind. FYI...there is a little known NJ...J-1 treaty. They don't pay tax, ever. However...NJ really goes over those returns. This guy just got his 2013 refund last week! But...he kept e-mailing me...and implying (not implying..actually said) that I screwed up and that's why it was taking so long...and calling NJ and fighting with them was part of my job. I told him my job was to prepare the return....that's it. That's when I offered him his money back. Now imagine...if he gave me such aggrevation over $2000...and if I do the return and he gets "caught" (I'm reasonably sure he'll get audited)...what he would do when he owes about $20,000. When I get some time off...I'm gonna sit down and write a nice..."I suggest you get a second opinion. If there are problems down the road, I don't want to be held accountable" e-mail. 1 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 6, 2015 Author Report Share Posted February 6, 2015 I finally e-mailed him. Here's an excerpt: So...the choice is: file the 1040 as planned and do not hold me accountable for anything that happens in the future Or...if you want....you could go to another preparer for an opinion (I won't take offense...and I actually recommend this. Maybe someone knows more than me...or less than me (meaning they don't know what's supposed to be done). Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 6, 2015 Report Share Posted February 6, 2015 (edited) Wonder what the IRS reaction would be if he take the advice to go to someone else who knows less, they do it wrong, he gets tagged by the IRS, and he shows them the printout of the email you sent him which essentially recommended that course of action. Edited February 6, 2015 by JohnH 2 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 6, 2015 Author Report Share Posted February 6, 2015 Wonder what the IRS reaction would be if he take the advice to go to someone else who knows less, they do it wrong, he gets tagged by the IRS, and he shows them the printout of the email you sent him which essentially recommended that course of action. Honestly....I'd rather deal with the IRS and me telling him to go to someone incompetent than what I went thru last year with his NJ refund. Quote Link to comment Share on other sites More sharing options...
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