Deleted
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Post by Deleted on Oct 18, 2011 11:44:19 GMT -5
My son-in-law did my taxes in 2009. He represented himself as an accountant, but turns out he's not at all - maybe a bookkeeper if even that (he's ex SIL now). I went back and looked at what he did and it looks really messed up - particularly around a rental home income/expense (it does not seem to be included at all). If I compare 2010 taxes to 2009, it looks like I overpaid about $10K in taxes for 2009. So a couple of questions related to this.
- What kind of audit exposure does filing a correction with a large refund cause?
- During this 2 year period I did a fair amount of repair work to the home (some repair, some improvement). How much does this aggravate the IRS if you have a technical "loss" on the rental for a couple years running.
- There were also some deductions taken that seem incorrect, so I think I have no choice but to fix this. It looks ridiculous.
Thanks!!
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rangerj
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Post by rangerj on Oct 18, 2011 13:43:58 GMT -5
File an amended return and make the corrections. If the corrected return is "right" then do not worry about audit exposure.
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TheOtherMe
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Post by TheOtherMe on Oct 18, 2011 19:47:24 GMT -5
If the rental is a passive activity, there is a $25K limitation to the losses.
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Post by activeonlooker on Oct 23, 2011 23:32:40 GMT -5
Also, any allowable passsive loss will be phased out as your modified AGI goes from 100k to 150k. But by all means, amend it. don't forget about your state return as well, if applicable.
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Deleted
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Post by Deleted on Oct 24, 2011 0:41:34 GMT -5
Thank you for the feedback. It is not passive income/loss, I actively manage the property. I contracted several repairs and improvements to the home in 2009 and 2010, so it wasn't until the 2010 taxes were done that I realized something was out of kilter with the 2009. I am just really embarrassed that the return is totally screwed up and I had difficulty getting any of the documents from him. Luckily i kept copies of all the receipts so at least I can reconstruct it.
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mwcpa
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Post by mwcpa on Oct 24, 2011 4:08:02 GMT -5
What kind of audit exposure does filing a correction with a large refund cause?"
not any more than any large refund claim, but amended returns are reviewed by humans, not computers, if that has any meaning.
"How much does this aggravate the IRS if you have a technical "loss" on the rental for a couple years running."
tax losses created by the operation of rental real estate does not really aggravate the IRS... but as noted in a number of postings be aware of the passive loss rules.... they are technical....
"I think I have no choice but to fix this. It looks ridiculous."
fix the errors, and explain them in a narrative... be clear and stick to facts only....
It will take the IRS 8-12 weeks to process the amended claim. they may ask questions.
"I had difficulty getting any of the documents from him"
clear violation of IRS circular 230.... all tax professionals are required to return all original documents to clients....
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Deleted
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Post by Deleted on Oct 24, 2011 9:41:10 GMT -5
fix the errors, and explain them in a narrative... be clear and stick to facts only.... "I had difficulty getting any of the documents from him" clear violation of IRS circular 230.... all tax professionals are required to return all original documents to clients.... He was never actually a tax professional. Another family member is a CPA & he just sort of 'assumed their identity' and thought he had their skills. Yeah, big mental health issue & breakdown. How I explain these facts is beyond me -- Do i really explain to the IRS the fraud & mental breakdown? I will have to think carefully how to write this! |
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rangerj
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Post by rangerj on Oct 24, 2011 11:55:37 GMT -5
Keep the explanations short and to the point, e.g. errors were discovered after the return was filed and this amended return is being filed to correct the errors. In explaining the individual errors do the same thing, that is keep it short and to the point, e.g. depreciation on property X was overstated and the corrected amount is$X.
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mwcpa
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Post by mwcpa on Oct 24, 2011 12:58:01 GMT -5
"He was never actually a tax professional. Another family member is a CPA & he just sort of 'assumed their identity' and thought he had their skills"
.... nice family member, well soon to be "ex" if I read this all correctly ....
funny thing about circular 230..... it covers all lawyers and all CPAs who "do tax work".... remember, just because someone is a CPA or a lawyer does not mean they know or understand tha tax law.... I have dozens of lawyers who are clients and at least 2 CPAs....
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