elfling Posted April 11, 2008 Report Posted April 11, 2008 Is there such a thing as an amendment threshhold? This situation seems absolutely ridiculous. A client discovered two quite small ($24.10 & $17.11) dividend statements from 2006. Running a 1040X creates a balance due of $2. Seems almost silly to file it. Client has not received any correspondence from IRS. It's true that to be totally accurate, an amendment should be filed. But is it sensible? What say some of you? Elfing Quote
jainen Posted April 11, 2008 Report Posted April 11, 2008 >>Seems almost silly to file it.<< According to Circular 230, you are supposed to advise the client of his need to file the return (little) and the potential penalty for failing (none). Don't forget to mention your fee (lots). Then follow the client's instructions. There are various reasons why a client might file even if not required at all, so don't be surprised if he doesn't agree that amending is silly. Quote
TaxCPANY Posted April 11, 2008 Report Posted April 11, 2008 Is there such a thing as an amendment threshhold? This situation seems absolutely ridiculous. A client discovered two quite small ($24.10 & $17.11) dividend statements from 2006. Running a 1040X creates a balance due of $2. Seems almost silly to file it. Client has not received any correspondence from IRS. It's true that to be totally accurate, an amendment should be filed. But is it sensible? What say some of you? Elfing Pragmatically, wait for the CP2000. It already hasn't come with this February's batch. If it ever does, consent to the change. MUCH less of a hassle than amending for such a trivial amount. TaxCPANY Quote
TaxCPANY Posted April 11, 2008 Report Posted April 11, 2008 Is there such a thing as an amendment threshhold? This situation seems absolutely ridiculous. A client discovered two quite small ($24.10 & $17.11) dividend statements from 2006. Running a 1040X creates a balance due of $2. Seems almost silly to file it. Client has not received any correspondence from IRS. It's true that to be totally accurate, an amendment should be filed. But is it sensible? What say some of you? Elfing Pragmatically, wait for the CP2000. It already hasn't come with this February's batch. If it ever does, consent to the change. MUCH less of a hassle than amending for such a trivial amount. TaxCPANY Quote
michaelmars Posted April 11, 2008 Report Posted April 11, 2008 Heck-amend and charge $500 for this stupidity Quote
Pacun Posted April 11, 2008 Report Posted April 11, 2008 I always tell my client... The IRS will catch it FOR SURE but the auditor will read your return, then he will decide if he needs to send you a letter. If the auditor feels that he will spend more on postage and handling, he will not send you anything. You do not tell your client, "maybe the IRS will not catch it". If you do that, the next time your client will leave out a 1099misc expecting that the IRS will not catch it. Last time, a TP came to my office with his previous 3 year returns and a letter from IRS. The IRS was questioning the Itemized deductions. On the return they made $53 and the itemized deductions were $35 in mortgage interest, RE taxes and 2106s. I checked all years I was surprised that every year they made about $100K. I asked them why they made so little that year and they said "we always make about the same amount of income". I checked W-2s carefully and a W-2 for $45K was left out. The IRS was asking for a $3K payment and I told this new client, if I amend, I will include the other income and I will not use any 2106s. The client agred and we added the additional W-2. I was surprised that the auditor didn't match their W-2s. At the end they owed 6K. Another one, a client told me that he left out $142.60 from dividends. I said... I will charge you $100 to amend or you wait for the IRS to send you a letter next year and you will owe them about $55. He said, I am going to wait. Next year the IRS send him a letter demanding more than $3K because he left out $14260 (fourteen hundred two hundred sixty). So, I guess you should amend. Quote
joanmcq Posted April 12, 2008 Report Posted April 12, 2008 There is a limit on what the IRS will send a CP2000 out for. Stock sales, almost always because they don't know the basis. a piddly little 1099-int like described above will not cause a CP2000. However, if they leave off something that WILL trigger one, the cp2000 will have every dollar in interest that wasnt' there. Quote
Jack from Ohio Posted April 12, 2008 Report Posted April 12, 2008 This discussion is just like certain of my clients that make sure I have put my fees and their union dues on Sched A. Even when those are the only deductions subject to 2% that they have. I just smile and say that I did deduct them, and they are happy. Quote
joanmcq Posted April 12, 2008 Report Posted April 12, 2008 Me too. Although a few do get the union dues deduction. Same thing with medical; then I can point out what they'd need for the deduction and how short they came. Sometimes we talk about bunching expenses. My investment expenses gave me $27 this year! Quote
michaelmars Posted April 12, 2008 Report Posted April 12, 2008 you must be paying too much for in broker fees <s> Quote
les grans Posted April 12, 2008 Report Posted April 12, 2008 "... he left out $14260 (fourteen hundred two hundred sixty)." Yep, that's what Pacun wrote... I have a very large check to write to the United States Treasury in the next coupla days. Will you help me fill it out? Quote
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