Amending 2009

[Terry D EA]

Last minute new client. I know how to ammend a tax return. Let's get that out of the way first. Another CPA, and for the life of me I don't know why, filed 2009 for a MFS for a couple who are married with no quarrels; etc, that should have been filed MFJ. They missed a few entries and included entries for the husband on the spouse's MFS that were identifed soley as the husbands. The spouse has already mailed the return and paid the tax due. My question with this is, this return should be amended but the taxpayer has not filed his MFS return. What are the right steps to take?

The only thing that makes me wonder is the taxpayer said this CPA no longer wanted to file his taxes because there was too many receipts and they didn't have time for it. (Makes no sense billable hours). With that said, the CPA has filed 2005, 2006, 2007 & 2008 MFS. Now, if this guy owes the IRS big time, or his tax situation is really stinky, then I can understand the CPA's recommendation for the spouse to file MFS. If not, then I am still lost. I did get the POA signed and will be talkinh with the IRS before I proceed. I may want to toss it to the wind as well based on what I find. If he is clean, then the crunch will be on to get the 2006 amended by 4-15.

[Catherine]

Last minute new client. I know how to ammend a tax return. Let's get that out of the way first. Another CPA, and for the life of me I don't know why, filed 2009 for a MFS for a couple who are married with no quarrels; etc, that should have been filed MFJ. They missed a few entries and included entries for the husband on the spouse's MFS that were identifed soley as the husbands. The spouse has already mailed the return and paid the tax due. My question with this is, this return should be amended but the taxpayer has not filed his MFS return. What are the right steps to take?

The only thing that makes me wonder is the taxpayer said this CPA no longer wanted to file his taxes because there was too many receipts and they didn't have time for it. (Makes no sense billable hours). With that said, the CPA has filed 2005, 2006, 2007 & 2008 MFS. Now, if this guy owes the IRS big time, or his tax situation is really stinky, then I can understand the CPA's recommendation for the spouse to file MFS. If not, then I am still lost. I did get the POA signed and will be talkinh with the IRS before I proceed. I may want to toss it to the wind as well based on what I find. If he is clean, then the crunch will be on to get the 2006 amended by 4-15.

Sounds very bizarre and that there is a LOT of very pertinent information missing. I think your idea of talking to the IRS first sounds good. My one concern would be getting a POA through fast enough. I've only ONCE gotten one filed through e-services successfully. So you may want to see if BOTH these folks could be in your office for a conference call with the IRS on Monday - and warn them that they'll be twiddling their thumbs for a while. You, of course, will be hammering away at your computer on another return while they're listening to that horrid muzak on speakerphone.

Good luck!

[jainen]

>>will be talkinh with the IRS before I proceed<<

What do you need to talk to the IRS about? You say you know how to amend a return, and the instructions to Form 1040-X at My link are perfectly clear about how to change from a separate to a joint return when only one spouse has filed. See page 5. It's just the way you would expect it to be.

First, though, you have to determine why the CPA agreed to separate the returns, and why both spouses agreed to file that way for so many years. Apparently your new clients admit to just dumping receipts late in the tax season, so I would guess the other guy finally got fed up with their marital chaos and told them to get lost. If they came to me, I would tell him to go ahead and file the way he worked it out with his preparer, then come back for a comprehensive review next month.

[Terry D EA]

Jainen the reasons for talking with the IRS is to obtain the prior years accounts. These folks probably don't know for sure what documents they need or should have kept. The other reason is to find out if the husband has some enormous tax liability, collections or anything else that caused the other CPA to recommend filing separate. I don't know if the other CPA will talk to me or not. The client's claim they will not return their phone calls. Thanks for the help

[OldJack]

>> the other CPA <<

For crying out loud.. call the CPA and ask why he filed as he did.

[BulldogTom]

I know it considered professional courtesy to tell the new preparer what you did and why, with client's permission of course. But it is also professional courtesy to not bother the previous preparer in the last week of tax season. If you know the CPA, personally or professionally, it might be ok to give him a quick call to discuss, but if you called me this week about a PITA client that you were taking from me, I would ask you to call me after tax season and explain my rates for consultation.

To me, it sounds like the client is not telling you everything. They may just be intentionally uniformed about their tax situation or hiding something. But this doesn't pass the smell test. Why didn't they just ask the CPA when they picked up the returns? Why are they coming to you at this late date?

Get a retainer.

Tom

Lodi, CA

[Terry D EA]

Tom, I agree with you totally. They came to me this late due to their daughter who is one of my clients pushing them to do so. The CPA who has done the previous filings has filed their returns as MFS due to the fact the husband has had a stroke and was incapacitated for a period of time. Because the wife had, and has power of attorney I have yet to see why the MFS in this situation. After speaking with the IRS regarding both of their accounts, there are no hidden gremlins lurking around. The problem is the tax liabilty generated by the MFS returns that might have resulted in a refund and until this is straightened out, the spouse is paying unless I can get it suspended for a time which I doubt. The IRS just wants the tax returns for the husband or amended returns that shows MFJ. The push now is amending 2006 by 4-15 to obtain any possible refund. This situation sounds more like the CPA was more of a PITA then the client. He/She won't return phone calls and has stated he/she will not prepare anything for the husband and their is no explanation for this. I personally would never contact another CPA, tax preparer, enrolled agent; etc at this time of the year. I have place 2003,2004, 2005, 2007, 2008 on the back burner as well and will not even attempt this until after the 15th. At the very least, I will contact and stay in contact with my client.

[OldJack]

>>I personally would never contact another CPA, tax preparer, enrolled agent; etc at this time of the year. <<

CPA's and other tax pros are in the business of serving the public and their present or past clients. We are running a business and that should include answering simple, quick, questions about our service even if it is on a busy day. We give an implied guarantee on our work and that doesn't end just because our client ends our business relationship. And we don't charge for explaining our work. There have been many CPAs that have been disciplined by their state boards for not providing documents and information to prior clients for whatever reason. Professional ethics and statutes require such from professionals.

To ask a CPA a general question as why he did something he did is not something that normally requires the clients approval. If it does require such approval the client should also be on the phone.

[Terry D EA]

OldJack I agree with your position. However, I have tried to talk to a client's former CPA and they have refused and yes, the client was able to get the information. In the current situation, amending these returns is of no emergency and out of respect as well of lack of time on my end, I am taking the time to wait. Thanks

[jainen]

>>their daughter who is one of my clients pushing them to do so<<

Okay, I'll take the bait: Why was the DAUGHTER pushing them to change? When adult children take a keen interest in how marital assets are allocated, that does not constitute a self-evident answer. And when they feed you some line about filing MFS for medical reasons, well, that's hogwash. I agree with Bulldog Tom that they probably aren't telling you everything. If so, it's a fair guess that they didn't tell the other guy everything either.

So when you have a bit of spare time, you might look closely at the daughter's file to see just why she recommends you. [For some reason this year I'm feeling even more suspicious than usual.]

[Terry D EA]

Jainen,

The only reason I see is I have been the daughter's preparer for a number of years. These folks were/are getting letters from the IRS demanding the returns. The discussions surrounded the lack or desire of their CPA to return phone calls, plus,the refusal to do the husband's returns. I agree the MFS for medical reasons is, as you say, hogwash. When I first looked into this, I agree, it didn't appear I was being told everything. However, discussing the situation with the IRS didn't reveal anything other than they want the returns for the husband dating back to 2003 or they will process substitute returns from the information they have. Unfortunately, this guy was incapacitated for a while from a stroke that has taken a few years to recover from. With that said, he is not fully recovered, is permanently disabled, and his recollection of tax information is poor. The wife, is just plain clueless and is scared to death of the IRS. She speaks broken english,and I am not sure what her native tongue is. Hence, the daughter being involved to bridge the communcation gap.

I will contact the previous CPA to see why the MFS choice before I get too much furhter involved. Have a restful break

[Lion EA]

I've had a couple of couples over the years where one had huge medical expenses and the other didn't. Some years it worked out better to file MFS since the 7.5% floor is lower when only one income is considered on each return. Had it happen when one was a teacher with huge unreimbursed employee expenses and spouse had higher income, so 2% floor yielded a better result with one income, making the two MFS returns better for them than MFJ. Now, if they also qualify for any credits that are disallowed for MFS, that can wipe out advantages. You have to run their returns both ways to be sure. And, check out the state returns. I had a couple of teachers come to me that had always filed MFS with their former preparer. Entered in my system, and the comparison looked like MFS was better; however, my software wasn't able to take into account everything, such as AMT. So, when I tried actual MFS returns and both were hit with AMT, then the MFJ ended up being best for them every year that I prepared their taxes. Their old preparer might have looked at the comparison in his software and not done the AMT computation manually.