IRS Notice

[Terry D EA]

One of my clients decided back in 2006 to complete their own tax return. In doing so, they left off one of their 1099-R forms. Naturally, the IRS found this and began to send the notices. My client did respond to the notice and agreed with all of their proposed changes without considering any possible withholds on the missing 1099-R. Now the client wants me to handle this. My question is, once the client responded with an agreement of the proposed changes, can I now change that response or is it etched in stone. I haven't had this happen before and would like some opinions.

Terry D.

[David1980]

You can amend the original return as filed or adjusted.

[BulldogTom]

You need to find out for sure if the tax has been assessed. Call the agent in charge of the audit and just ask if it is closed or not. If the case is closed, file an amended return. If not, share your information with the agent and they should fix it. The 1099R has the details, so it should be a non-contentious conversation. The trick is going to be getting in touch with the agent.

Tom

Lodi, CA

[kcjenkins]

The CP2000 should have added not only the 1099R but also the withholding. Be sure that this has not already been taken into account.

[Tax Prep by Deb]

The CP2000 should have added not only the 1099R but also the withholding. Be sure that this has not already been taken into account.

I agree with KC. Everyone of those notices I have seen has included the withholding. Where I run into the problem is with the state (CA) they don't automatically credit you with withholding, you have to have proof and request that it be applied.

Deb!

[mcb39]

My problem with the CP2000 (as if we need these kinds of problems right now) is that my couple is divorced; both living in excess of 200 miles away from me and not near or speaking to each other. The wife signed the CP2000 giving me permission to handle it. After 45 minutes on hold; I got a "real" person. I had to fax her the page with the signature only to be told that she needed both signatures in order to help me. I just called him and he faxed me his signature for what it's worth. I will have to mail them the whole mess and hope that my cover letter is clear enough to explain the situation to someone. They actually don't owe any tax as they have over a $4000 loss on the stock sale that they didn't report. Will the IRS calculate the additional refund.???? And what about the carryover loss to 2008? This couple sold the stocks to pay for their BIG wedding and were married less than 7 months before they split.

End of sob story!!!!!! :huh:

[kcjenkins]

Yes, they will process what you send them, and make the adjustment from a balance due to a refund due, and then the question is 'who gets the refund?' I'd suggest that they agree in advance, or send in an 8888 with the other paperwork, showing that each should get their portion to their bank account. Since you will have calculated the refund, you can put in the amounts to each account on that form.

[mcb39]

Yes, they will process what you send them, and make the adjustment from a balance due to a refund due, and then the question is 'who gets the refund?' I'd suggest that they agree in advance, or send in an 8888 with the other paperwork, showing that each should get their portion to their bank account. Since you will have calculated the refund, you can put in the amounts to each account on that form.

Thanks KC. As per my recommendations, they are in agreement that she will get the refund as the stocks were gifted to her by her parents before she married. I try my best to do the job right; but these kinds of messes are not conductive to a smooth tax season right at this time with a due date of April 8. I have another almost identical one on my desk which will be a wash; another divorce, another stock sale of the wife's stocks. However, they are local and in complete agreement. Actually, are filing joint this year so much easier to deal with. Also, no name changes. Again, thanks for your reassurance. The lady I spoke to last night was NOT helpful in any way.

[kcjenkins]

If you get many of these, you might want to acquaint yourself with another tab on the 1040 form that I just noticed for the first time. Click on the "Pages & Worksheets " tab, and look down it right after the Line 63 Est Tax tab, for a tab called "Divorced in 2008". It's all set up to deal with people who divorced this year, but made joint estimated tax payments, or made estimated payments under the married name, and have now changed that name.

[cpabsd]

If you get many of these, you might want to acquaint yourself with another tab on the 1040 form that I just noticed for the first time. Click on the "Pages & Worksheets " tab, and look down it right after the Line 63 Est Tax tab, for a tab called "Divorced in 2008". It's all set up to deal with people who divorced this year, but made joint estimated tax payments, or made estimated payments under the married name, and have now changed that name.

Thanks KC - that's why I love this board. I learn new things all the time.

[mcb39]

If you get many of these, you might want to acquaint yourself with another tab on the 1040 form that I just noticed for the first time. Click on the "Pages & Worksheets " tab, and look down it right after the Line 63 Est Tax tab, for a tab called "Divorced in 2008". It's all set up to deal with people who divorced this year, but made joint estimated tax payments, or made estimated payments under the married name, and have now changed that name.

Awesome!!!!!!!!!

[Margaret CPA in OH]

That is truly awesome! From years ago I learned to attach a statement on the front page allocating the total payments to each taxpayer. Very often from year to year the filing from separate to joint would change and getting this right was a challenge. It's still, unfortunately, a state issue. They really don't like to split combined payments. More than once I've heard that I should have had my clients each pay their own estimates. As if I could predict the totality and optimization for the next year...