Lee B

My understanding is based on a long presentation and discussion at in all day CPE class sponsored by the OSCPA is that if the error/mistake occurs two years in a row that creates an incorrect method which can corrected by a 3115. If the error/mistake is a one off (happens once ) then that is corrected by an amended return. It doesn't matter why the depreciation errors occurred, the fact they did occur and were repeated creates a method which can be corrected with a 3115. In the presentation, correction of depreciation was used several times in examples. By the way the presenter was the Chairman of the AICPA Taxation Committee.

I was going through documents a long time client dropped off, when it suddenly registered on my brain that I was seeing a new address on some of the husband's tax docs. So I called him and asked whether they are perhaps separated? He says, yes but we weren't at the end of the year. Then I look at the engagement letter and the spouse's signature amazingly looked like his writing. I already knew that this guy wasn't the most truthful client I had. So that's it! I'm done, returning his documents back to him. In 28 years, I have dealt with divorced clients only once. That experience convinced me to never do that again. The risk reward relationship of dealing with divorced clients is not very good.

Discussion thread with a lot of hypothetical ideas and a significant lack of substantive facts. Assuming this client lives in MO, the state of the poster, more than likely state law will be the determining factor in how this all ends up.

If you help them set up a "Secure Access" account, they can set up their own payment plan. Of course you might have coach them through it, but it would be much easier and way quicker.

This is extremely strange, because I mailed an amended 2019 Form 1040 on the same day. My client received a refund check in late July about 4 months later. It's like playing a slot machine.

Or by putting the daughter on the Title did the mother gift 50 % of the home to her daughter?

Their SE and taxable income is based on their share of the PTS Annual Income. Their monthly draws( distributions ) don't determine their taxable income.

We all hope for the best

What kind of business entity is he?

That is really not cool, especially given her job responsibilities. "Trust is earned not given"

Exactly, I prepared a 2nd PPP Loan application last Friday for a client whose 2nd quarter revenue decline 25.02 % who qualified. Their loan is now approved, just needs to be esigned for funds to be disbursed. If this is their first PPP Loan, they shouldn't have a problem, they just to state that it's an economic necessity. Since the second quarter declined by more than 20 %, they alternatively qualify for the Employee Retention Credit, which is messy and confusing.

According to IRS testimony to the House Ways & Means Cmte, the combined IRS Backlog for tax years 2019 & 2020 is now 24 Million Tax Returns! Included are 12.3 Million paper filed tax returns, plus 6 Million tax returns with unresolved issues which will require manual intervention! The 12.3 Million paper filed returns includes a number of business returns.

Copied from IRS eNews: "3. American Rescue Plan Act of 2021 – Don’t file related amended returns yet The IRS urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information will be made available as soon as possible about: Unemployment (IRS emphasizes not filing amended returns, until it issues additional guidance) New round of Economic Impact Payments Child Tax Credit, including advance payments"

The IRS has announced that no one should file amendments claiming the Unemployment Benefits Exclusion or Recovery Rebate Credits for any children for which the taxpayer did not receive the $ 500 or $ 600 from EIP 3. The IRS will use the data from filed 2020 tax returns and send out payments mid summer this year. I am sure they were having nightmarish visions of being inundated with amendments. Oh the horror

Yeah, these Drake entry screens and the k199 ( QBI ) entry screens drive me crazy!

Once again we have proven two or more heads are better than one

Emphasis added

If you have documentation to show that the original land/bldg allocation was done incorrectly and the $45,000 in improvements were never expensed, then you have something to work with. As a practical matter, rental property that was acquired many years ago, usually has significant amounts of depreciation recapture and capital gains. Unfortunately, we aren't given magic wands.

You need closing summary from when property was purchased which the title company would have or alternatively the property records from that year. You need all of the tax return copies she can find. If you have enough documentation then you could file Form 3115 to catch up all of the expenses and depreciation, which would be deductible in the current year. Remember it's your client's responsibility to keep all of this stuff.

IR 2021-59 says formal guidance will be issued soon.

The ARP specifically refers to tax year 2021 with respect to claiming any RRC related to the third round of EIP.

The IRS has released an announcement saying that they are using their discretionary authority to not deduct unpaid taxes etc. from the third round stimulus payments.

This is what "power naps" are for zzzzzzzzzzzzzzzzzzzzzzzz

Yep, the only way to access that info now is if your client sets up a "secure access" account.

A modest compromise, only applies to filing 2020 Form 1040 and the balance due. Does not apply to any other forms or payments.