Missing K-1

[Kea]

Client was a partner in a business but had a falling out with other partners. He has not been able to get a K-1 from them & now they won't return his calls. Can he just estimate the income? Or, what other options does he have if he can't get the K-1?

Thanks.

[ILLMAS]

Maybe he can call and request a transcript for the year, I would think the IRS would have something on file regarding the K-1.

MAS

[Kea]

I'll suggest that, but I don't think the remaining partners have done anything about the taxes yet. That was part of the problems -- the other partners never seemed too concerned about getting taxes done.

[JohnH]

Was there some consistency in the year-to-year income in the past? And does he have any idea about how things should look based on what he knows about 2009? If so, it MIGHT be a good idea to file the return with an estimate based on any personal information he may have to back it up (payments to partners he received, insurance, etc). If the info isn't available, he needs to file using the best info he can come up with. He can always amend if he gets a K-1 at some point in the future.

[Don in Upstate NY]

... he needs to file using the best info he can come up with. ...

And attach a 8275 disclosing how the amounts were determined.

[TAXBILLY]

Definitely include form 8275 which would also protect you.

taxbilly

[Taxlave]

I suggest filing Form 8082 and explain that no K-1 was received despite repeated attempts to obtain. I usually add that an amended return will be filed if necessary when/if the information is received.

[Kea]

Thanks so much. I will let him know.

He was only a partner for about 2 or 3 years. New business. He was the one who handled getting the K-1 completed in previous years. Other partners were less interested in getting everything done timely or accurately. They were more "casual" about the business and he was more "picky." I'm guessing he will have a lot (but probably not all) the info for an estimate.

Thanks again.

[TAXBILLY]

Thanks so much. I will let him know.

He was only a partner for about 2 or 3 years. New business. He was the one who handled getting the K-1 completed in previous years. Other partners were less interested in getting everything done timely or accurately. They were more "casual" about the business and he was more "picky." I'm guessing he will have a lot (but probably not all) the info for an estimate.

Thanks again.

Now I'm confused. Are you saying he was the one preparing the 1065 in previous years and he now has most of the information and he is still a partner?

A slippery slope here. THE IRS would probably regard him as the tax matters partner and for him to claim he all of a sudden isn't would be a problem.

The other partners will probably say your client is the one to contact if the IRS comes a'callin.

taxbilly

[Kea]

He became a partner in 2007 or 2008. I believe the other partners were already in business prior to that (but not 100% sure of that). In the spring of 2009, he took the info to another accountant to prepare the 1065. He asked me to do it, but I've never prepared a 1065. I can check to see if he was the one who signed it. (I apologize for not remembering the exact dates or time-frames, but I'm not on my "work" computer right now.)

Later in 2009, the other partners seemed to prefer to go back to their more casual ways & at some point stopped returning his calls. In 2010 he tried to contact them so that he could get the 1065 prepared and they informed him that they would take care of it. They've pretty well cut him out, but I'm not sure that any formal dissolution has occurred.

I agree that the IRS might not understand his no longer being the tax matters partner. I know he has everything documented. Maybe it will will just require a long letter of explanation.

Is there a form he can use to notify the IRS that he is no longer the tax matters partner?

Thanks.