RitaB

Hug after he has coverage. C'mon, I'm willing to work with people.

So this just happened. Client calls and tell me he's purchasing health insurance. Congrats. "I've not had any health insurance for any of 2016. Will I still have to pay the penalty for 2016?" I just need all of you to appreciate this moment with me. I wonder if my soul has been removed to make room for all this sarcasm I managed to push down. Happy New Year.

The hugging notification is down right now, but mine generally are nice surprises just for clients. Merry Christmas my very clued in friend.

I might just edit my email from "you're fired" to "you're fired in two weeks if you don't get your in here" and resend. I probably would not say anything else and let him calm down. He'll forget in a week anyway. If he shows up before the two weeks is up (yeah right), carry on as usual, except my rates went up from a year ago.

I told you I could not make a post without a screw up.

Yes, I've had partnerships where one of the partners put his SSN on a W-9 instead of the EIN. Stuff like that happens. Put the income on Sch C and back it out. I for one am not waiting around hoping a 1099 gets corrected. We dream of that, but we have crap to do.

Rich (can I call you Rich?) is one of the most knowledgeable posters on this board, and I'm sure he thought of all the headaches that may come up with these [soon to be] taxpayers before he posted. I also think he's had the "how the hell could you live off $14,000 and the windfall refundable credits" talk with them, since they admitted they spend $120,000 -$144,000 a year on personal expenses. And since there is no mention of living off savings, credit, gifts, or personal savings, I'm thinking these folks made, well, six figures. Unless the tax pro retired, died, became incarcerated, or the [soon to be] taxpayers moved, they either fired the tax pro or the tax pro fired THEM. That's what I'm coming up with. I suspect the [soon to be] taxpayers are at LEAST as much to blame for the inaccurate returns as the tax pro. I also think they knew their last tax return was horrifically incorrect before they came to Rich, and they're ready to get off the public dole and pay their taxes. They spend $120,000 a year and can cough up my tax prep fee or Rich's tax prep fee for an accurate return without whining, too. This is a success story! One fraudulent EITC that won't happen in 2017. That's one down. Good for you, Rich, and good for the rest of us people paying taxes.

Good job! Good job!

Works out great when we don't take vacations!

You complete me.

Well, I can't really blame them for that. I also realize I said Form 1065 instead of 1120S up there. I can never make a post without a screw up.

You could also ask said firm what they do.

I don't know any other way to handle it. I've never requested a Revenue Ruling or the like, but I've have never had it questioned when I backed out 1099-Misc Box 7 amounts that were really employee reimbursements that belonged on Form 2106, for example. That doesn't mean it won't be questioned when you do it. But you know they'll question it if they don't see it on Sch C gross income. Let's see what others think.

You could report the gross on Sch C, then back out the gross on one of the "Other Expenses" lines on p. 2 of Sch C with an explanation to this effect: "Issuer incorrectly prepared 1099-Misc with recipient SSN. Income is properly reported on Form 1065 for EIN # blah, blah, blah."

Gail is absolutely correct. Nobody here is advocating trying to make another preparer look bad. And Pacun, Catherine raised an excellent point. My new clients with loss carryovers frequently don't even know they have them. Let alone how much. Forget getting depreciations details out of client. It's impossible. Are you not concerned that you are missing deductions?

It seemed obvious to me that Naveen is talking about people who will be his clients. The question of "how do I deal with the clients" when they get letters presupposes that the clients are going to be bringing the letters to Naveen because he is their preparer now. I don't think he is just calling all these people before they come in to see him. He mentions that he can't "give back" the returns to the seemingly incompetent and now retired preparer. My take on this is that Naveen is asking for our advice about what to do when these folks come in for tax prep in a few weeks. Tell them about suspected errors or no? I do believe Naveen has a duty to discuss suspected errors, and sure, he may find out things are not as dire as he thinks.

I think you'd prepare an amended 2015 return, unchecking the "final return" box and checking the "amended return" box. In the interest of full disclosure, I didn't search very long for an answer, nor did I find this situation addressed, but this seems logical. That's about all I got.

Me, too! .

Two kinds of people, I guess. I pick that thing apart. No just glancing for me. That's no fun. CSI over here.

Totally agree with Abby. I normally do. (See what I did there?) For sure, you want to be respectful of previous preparer; nobody wins trying to outshine somebody else. This will be a great opportunity for you, and I'll betcha many of the clients won't be surprised at the errors. Be gracious, and yes, it will seem you are spending twice as much time as you should. Just part of it; they're gonna love you, Naveen.

I give all my clients a paper copy in a nice (but not extraordinarily nice) folder. I'll have about eight or so that "can't find" that copy at some point after the fact, and I make another copy free gratis for one time offenders. Clients who "lose" returns more than once get a fee increase next go round to make me feel better about having to be mom to people who do not share my DNA. I don't point it out - I'm the mom; I don't have to explain.

Also be less complicated if somebody hadn't made that seventh post. Grrrrrr. LOL.

It would be even more pleasant if somebody paid me to chat. There's that...

OK, check this out. I am thinking (for this purpose), a payment made by one legally obligated person can't be considered a payment made on behalf of another legally obligated person. (So if son made all payments, dad can't get credit for any payments, and vice/versa.) https://www.law.cornell.edu/cfr/text/26/1.221-1 (4) Payments of interest by a third party - (i) In general. If a third party who is not legally obligated to make a payment of interest on a qualified education loan makes a payment of interest on behalf of a taxpayer who is legally obligated to make the payment, then the taxpayer is treated as receiving the payment from the third party and, in turn, paying the interest.

Oh, I may be taking that too literally. (You paid interest on a qualified student loan in tax year xxxx). Gotcha. Yes, it's on page 33 of Publication 970.