MargaretMort Posted April 17, 2009 Report Share Posted April 17, 2009 I posted this with a lousy topic title and received no replies and I sure can understand why at this time of year. Really need advice on this one. I screwed up, with a little help from my client. A lot was sold but I never showed the sale. We have been reporting the interest received each year so that is not a problem. Now that I am aware of my error, I feel that I need to amend 2003. I would dearly love to do a 6252 on this sale but I don't know if the IRS will allow that. Of course, if I use the 6252, I must amend all the returns up to this year. I haven't sat down and re-done the returns because I hate to waste my time and energy, of which I have little-energy, that is. I also don't want to send in an amended return with the 6252 only to have the IRS decide down the road that it won't fly and therefore, all the amended returns are invalid and open to question. I think my main concern is if the IRS will accept a 6252 for the year of sale in an amended return. Logically I don't think so but I sure would like some suggestions about this. My sincere thanks. MM Oh, and Taxbilly, I went to the golf course today. Not sure what I was doing but what the heck, the weather was wonderful and I wasn't looking at the computer. I had great plans for next week which went awry when one of my husband's drs. changed his appointment and a neighbor will need my help while she is recovering from minor cancer surgery. Next month! Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted April 17, 2009 Report Share Posted April 17, 2009 I'm no expert, but I think the real problem is in the timing. 2003 returns had to be ammended along time ago. Had you caught it earlier I don't think there would have been a problem, but I think it's going to be difficult changing a return that old. Just my two cents worth, but then again, I'm no expert! Deb! Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted April 17, 2009 Report Share Posted April 17, 2009 I posted this with a lousy topic title and received no replies and I sure can understand why at this time of year. Really need advice on this one. I screwed up, with a little help from my client. A lot was sold but I never showed the sale. We have been reporting the interest received each year so that is not a problem. Now that I am aware of my error, I feel that I need to amend 2003. I would dearly love to do a 6252 on this sale but I don't know if the IRS will allow that. Of course, if I use the 6252, I must amend all the returns up to this year. I haven't sat down and re-done the returns because I hate to waste my time and energy, of which I have little-energy, that is. I also don't want to send in an amended return with the 6252 only to have the IRS decide down the road that it won't fly and therefore, all the amended returns are invalid and open to question. I think my main concern is if the IRS will accept a 6252 for the year of sale in an amended return. Logically I don't think so but I sure would like some suggestions about this. My sincere thanks. MM Oh, and Taxbilly, I went to the golf course today. Not sure what I was doing but what the heck, the weather was wonderful and I wasn't looking at the computer. I had great plans for next week which went awry when one of my husband's drs. changed his appointment and a neighbor will need my help while she is recovering from minor cancer surgery. Next month! I also had a great time yesterday. The golf wasn't that good but just to be in the fresh air was awesome. I also took a few quarters off my buddies who thought I would be an easy mark not having played for awhile but I'ld rather be lucky than good. taxbilly Quote Link to comment Share on other sites More sharing options...
LindaB Posted April 17, 2009 Report Share Posted April 17, 2009 Years ago when I worked at Block I had a situation like this. New client came in, they had sold a property about 8 years prior, but never reported the sale. They showed the interest income each year but thought they were recovering their basis for those years, and finally would show the gain, that's why they came in. I ended up amending all prior years, starting with the installment sale. Each year had a small balance due. We put them all in one big envelope, included a letter of explanation, and they sent a check for the total due. I told them to expect a bill from the IRS for interest and maybe penalties. I never heard back from them, but it's possible they could have called Block later and I never heard about it, although I worked off-season so I think I would have heard. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted April 17, 2009 Report Share Posted April 17, 2009 Just off the cuff, but it would appear your client would have a tax due once the sale is reported. With that said, the IRS can collect a tax liability back to seven years prior to the return filing date. I think the main question here is would the IRS accept the installment sale. You are right that this would be alot of work when you are uncertain of the outcome. For what ever it is worth, a phone call to the IRS to try to speak with someone who would be able to give you a good answer might be in order. Problem is, finding that person. Maybe Ibbwest or Jainen will chime in as they maybe able to give you the best insight. Terry D. Quote Link to comment Share on other sites More sharing options...
joans Posted April 17, 2009 Report Share Posted April 17, 2009 I have an S corp that an asset was incorrectly entered on 2004. So I am amending 2004 - 07. Filed extension for 08. Then I have to amend the personal return where the k-1 flowed. I know this isn't an installment sale, but I would think that would be the same thing. I also had to amend an installment sale for 06 & 07 where we reported payments were made and in reality only interest was paid. So, I would show the installment sale from 03 and see what happens. You are doing the right thing and attempting to correct a human mistake. It happens:) Even to the best (or worst) of us:) Good luck with everything and it actually goes pretty quick when you get in the groove. Sara Quote Link to comment Share on other sites More sharing options...
MargaretMort Posted April 17, 2009 Author Report Share Posted April 17, 2009 Thanks. I am considering working out what it will cost him to show the sale in the year of sale as opposed to what it will cost him when I change 5 years of returns and re-do this years. 2008 is on extension so I have time to do this. What a mess and dumb on my part because I certainly know better. I think I put blinders on during the last two weeks of tax season which is when I get his information. MM Quote Link to comment Share on other sites More sharing options...
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