Education Expense

[indyscott]

Sheepishly ashamed to admit that last year I did a return for a couple who paid son's college tuition, and I failed to manually add the 8863 for Lifetime learning credit. I did put the tuition payments on line 35 as an adjustment, but I guess when I tried putting the x's in the boxes to see which box gave the highest refund on the return, I didn't realize that the program doesn't automatically add the form for the Lifetime learning credit, so.. the L35 adjustment of course provides a higher refund. This year, I'm doing it and trying to see why is their refund so high this year compared to last.. oh,.. it's because I messed up last year.

So, now I have an ethical dilemma. S/ I self disclose my error from last year, and do a n/c 1040x for them (to get about $1,000 extra refund), or s/ I keep my mouth shut, and hope they don't discover it themselves...

[GLJEANNE]

Sheepishly ashamed to admit that last year I did a return for a couple who paid son's college tuition, and I failed to manually add the 8863 for Lifetime learning credit. I did put the tuition payments on line 35 as an adjustment, but I guess when I tried putting the x's in the boxes to see which box gave the highest refund on the return, I didn't realize that the program doesn't automatically add the form for the Lifetime learning credit, so.. the L35 adjustment of course provides a higher refund. This year, I'm doing it and trying to see why is their refund so high this year compared to last.. oh,.. it's because I messed up last year.

So, now I have an ethical dilemma. S/ I self disclose my error from last year, and do a n/c 1040x for them (to get about $1,000 extra refund), or s/ I keep my mouth shut, and hope they don't discover it themselves...

I would definitely do the amendment. Not only the ethical thing to do, but the goodwill it will generate could go a long ways.

I find it SO annoying that the program doesn't add the 8863!!

[lsowers]

I would do the amendment. Most clients understand we make mistakes, too. And they appreciate it when we can admit it.

[zeke]

Anyone that would not do the amendment cannot go to the reunion with Ray in Ohio this summer & will miss Janitor Bob's frikkin' banana display!

[indyscott]

Gosh, all you guys who say to do the right thing are quick to reply! Surely, there's some dog out there thinkin' "I'd let it lay..."

I guess I'll follow the voices of my "good conscience".

[jklcpa]

Yes, do the amendment. Don't you think the clients will also be asking why the refund is so different from LY ? I know mine would.

[indyscott]

Jeanne, since you mentioned your annoyance at the program not adding the 8863 automatically, I thought, gee, someone ought to put that in the suggestion box at ATX. So, I did just that.

[MJG CPA]

So, now I have an ethical dilemma. S/ I self disclose my error from last year, and do a n/c 1040x for them (to get about $1,000 extra refund), or s/ I keep my mouth shut, and hope they don't discover it themselves...

Yes, I've been caught by that too. You have to amend - the client will think more of you for it.

[mcb39]

You HAVe to amend or it will never leave the back of your mind. You have a responsibility to your clients to do what is best for them. They will respect you all the more for it.

[bstaxes]

Amend and correct it. The client will probably think more highly of you. It goes a long way for your reputation to be honest. If you want blame a computer gluch for the error.

[tilt]

Think of it this way - how would you feel if it was your personal return? Wouldn't you want your preparer to be up-front with you? Wouldn't you want the extra $1000? Your client will be impressed that you did an extra review and admitted to being human.

[taxperson]

I thought the education forms opened automatically so I tried it. They do. After you check one of the boxes, save the return and the associated form opens. If you've unchecked the "Open associated forms..." box checked in Return Manager - Options, Preferences, Open Return, they don't.

And if you jump from box to box on the Education Expense form and leave the wrong one checked? It must ba a Monday.

[Janitor Bob]

I thought the education forms opened automatically so I tried it. They do. After you check one of the boxes, save the return and the associated form opens. If you've unchecked the "Open associated forms..." box checked in Return Manager - Options, Preferences, Open Return, they don't.

And if you jump from box to box on the Education Expense form and leave the wrong one checked? It must ba a Monday.

This year, the 8863 opens automatically if you check that box....but last year I do not think it did.

I would just tell client that, in preparing this years return, you discovered an over-looked item from last year...and that you would gladly do a N/C amendment to get them some additional money.

[taxperson]

Curiosity got the better of me so I tried it. It worked that same way last year as this except it was a worksheet in the 1040 form instead or the Ed Expense workbook. The software worked but go ahead and blame the goof on it.

[gaohana]

Absolutely do the amendment, show me a preparer that has "never made a mistake" and I'll show you a liar.. ;)

[lydia33]

Our mistakes are easily corrected by the 1040X. A doctor's you would bury in the ground. Amend the tax return and admit you are human.