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Screwed up taxes... Overstated prop taxes deduction.

2,057 Views | 10 Replies | Last: 7 yr ago by BigPuma
Gordon McKernan
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Bassmaster
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AG
I would amend. If you can't support the amount of the deduction and you are audited, you would be in a rough spot.
combat wombat™
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The correct thing to do is amend.

However I have had clients make mistakes like this and decide to just wait and see if they are audited. If you don't get audited then you get away with it. But that's kind of like cheating isn't it?
BigPuma
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Technically you should amend. Although as wombat said I would give my client the option to roll the dice. Whats the tax effect?
combat wombat™
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By the way if you're paying AMT doubling up on your taxes probably had no impact on your return.
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Gordon McKernan
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libertyag
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jake2011 said:

You guys really have clients who choose not to amend a return that is wrong? What a dumb***.
Yeah and some went over the speed limit on the way to tell me they messed up and didn't assess a fine on themselves.
combat wombat™
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jake2011 said:

You guys really have clients who choose not to amend a return that is wrong? What a dumb***.
They do a cost benefit analysis. How much will it cost to pay to have it amended vs the penalty & interest they'll pay if audited. If they are audited, they will owe additional tax (which would have been owed in any case) and some penalty & interest. In some cases, they are willing to risk it. I wouldn't call them dumbasses.
Ranger222
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Odds of being audited
combat wombat™
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By the way, I agree that amending the return is the correct way to handle this. However, I can't force a client to amend. I can tell them there's a mistake, and that it won't hold up under IRS scrutiny and that amending is the way to fix it. You might be surprised at how many people decide to let it ride.
BigPuma
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combat wombat said:

By the way, I agree that amending the return is the correct way to handle this. However, I can't force a client to amend. I can tell them there's a mistake, and that it won't hold up under IRS scrutiny and that amending is the way to fix it. You might be surprised at how many people decide to let it ride.
As a fellow tax professional, I am not surprised. Oftentimes, it depends on the tax effect.
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