zero tax

[fliszt]

Last year client adopted 2 children from Central America. Their total expenses were $25,308. There was a carryover from 2007 to 2008 of $14,027. Client is also loosing money from two townhome rental units. Their AGI this year is $136,369. Sched A deductions are $41,234. Then by the time he gets to line 71 of the 1040 (total payments) $18,451, he gets a refund of all tax withheld.

To me this sounds like an automatic audit. Client is very honest and I believe all deductions are justifiable. But the $0.00 tax makes me nervous.

Any comments would be appreciated.

[DTS]

Larry

To me this sounds like an automatic audit. Client is very honest and I believe all deductions are justifiable. But the $0.00 tax makes me nervous.

I would bet you $20 that you are preparing this return the way it should be, so I would not worry about an audit. If it does comes and everything is correct and in order, I don't see your worry.

As to the $20, I think this is a bit too extravagant, eh?

D

[BP.]

Don't be nervous about the results. Have seen these several times- higher AGI, but zero tax, especially with adoption credits, and full refund of FIT w/h, with no audit as a result. Anyway you're confident of client's figures, so share their joy!

[jimmcg]

Audits are fun! They are also a source of revenue for you.

[fliszt]

Thanks so much

for your replies. I just got off phone w/client and he found all the receipts, so guess I've got a "go" on this one.
Boy!!! What I couldn't do with a $18,000 refund eh?

Larry