Client wants to file before 4/15 without K1

[Kea]

When looking at client's 1099 consolidated, I just happened to notice that he had dividends from an MLP. I googled the name & found that they issue a K1. I asked client for his K1 & he knew nothing about it. Then realized he got one for 2012 in June 2013 & sent me that one. The interest was around $25 & nothing much else on there. So I'm not recormmending ameding the 2012 because any tax difference would be insignificant. I did tell him he might get a IRS nastygram.

For 2013 he found out he won't receive his K1 until June but wants to file now. The numbers are small & he thinks we can "work this out."

Is it fraud to file a return I know is incomplete - even if the missing K1 will probably not change the return significantly?

[michaelmars]

NOPE you have the right to estimate and thus you are estimating -0- but in these cases I usually use the same as last year, good old Aunt SALY as I was taught.

[Lion EA]

For income I take SALY and maybe round up; expenses SALY and maybe round down or 0 if it's been inconsistent over the years. I tell them my fee for their amended return. If the eventual K-1 results in a refund, they can decide if it's worth my fee. I push them to amend when they'll owe to stop the interest and the IRS nastygram. Seldom get to it, but try to write on the engagement letter that they had me estimate the missing K-1 amounts and them initial that addition. If the K-1 is a big part of their return, I really push them to extend.

[Kea]

Thanks. I had planned on making him extend, even though everything else seems to be complete. If he really wants to file without, I will.

Just a bit concerned about that whole signing that everything is true & correct under penalty of perjury statement.

[Lion EA]

As far as you know.... I often have a proform K-1 from the administrator or an spreadsheet of his dividends or a history of similar numbers or a history of really small numbers relative to his other income/wages/investments and deductions/taxes/interest.

[Kea]

Client actually wants to report values of 3 times what they were in 2012 just to play it safe.

Reporting any values without the actual K1 would require me to file a Form 8082, right?

[Max W]

If the underrepresented income is less than $50, or $14 in tax, you do not amend - and no nasty letters will go out for $25.

[Kea]

I expect any change to be very small. I'm also just checking on the 8082 Notice of Inconstant Treatment being required.

[Crank]

I appreciate this question and the replies as I just rec'd a k-1 on Saturday for my son with interest $3, dividends $1, Cap Gains $8. It doesn't change the tax on the return so I was contemplating not amending. I don't think I will.

[Kea]

I know IRS does not want to process amendments for no change or very small change. That's why I didn't advise amending the 2012 return.

But, for me, it's a different story when I file a return KNOWING information is missing.

I've only filed a Form 8082 for one other client. His partners were no longer talking to one another and no one was even filing the partnership returns. It got pretty ugly, but after about 2 years he was able to get out of the partnership.