Advice: What To Do?

[SueBaby]

Have a client every year that had 10-12 states. He brings a letter from 2006 that the state gave him the other day and he owes $149. When I looked back I found out I duplicated the $149 twice and put the other on the wrong line. So now he will pay $149----for my mistake!

QUESTION: Do I pay for the $149 or just amend the state and take the other $149 off and let him pay for it? I feel bad about it but I remember he always brings his kids and the many states he has I am surprised I didn't make any more mistakes than that!!

There is no excuse but any mistake that I make I really feel bad especially if they have to pay. So what would you do about this situation? For me or him to pay or just let it go as a overlooked mistake?

[taxmandan]

I would correct the mistake and pay the money, it's a small price to pay for continued goodwill with the client.

[wv112]

I would correct the mistake and only pay any penalty that would be due. I wouldn't pay the tax. Good luck.

[Beth]

Or offer to do his return free or discounted this year....

[RitaB]

Did he owe the tax?

I am not really following what exactly happened, but if I make a mistake, I amend the return free of charge (or whatever needs to be done) and pay any penalty and interest. If the client would have owed the tax on a correctly prepared return, client pays that.

Here's my sad story: Last year client had a big class action settlement which applied to a closed partnership. Well, I entered all of one 1099-Int on his return, cause it had his SSN number instead of the partnership #. Anyway, client didn't catch it. Mailed IRS a big check.

When other partner came in, he told me that half of that interest was his.

I amended first partner, free of charge, and he mailed 1040X on April 25, 2008.

He still has not received his refund. I have called IRS twice, and the amended return is still being "reviewed." I'm in the process now of getting a CAF # and then filing Form 911.

Anyway, my point (and I do have one) is this: Taxpayer qualified for $1200 stimulus payment with EITHER return. They have a letter dated June 23, 2008 saying as much. However, IRS did not mail the check, presumably because of the ongoing "review."

Taxpayer only qualified for $600 RRC in 2008. I attached letter to 2008 return explaining all of the above, and put $1200 on line 70. If IRS does not allow the other 600, I'm going to write the client a check for $600. They have been clients forever, and now the husband is in the nursing home. I figure God will pay me back.

But, I'm still am going to argue like crazy in an attempt to get IRS to pay it. :-)

[Roberts]

If it is my mistake I pay penalties and interest and the client pays the tax. If I had done everything correctly, they would have owed this anyway so it isn't my responsibility.

If they return the next year, I do their taxes for free or greatly reduced. If they are willing to work with me again, I'm going to show my gratitude.

[joanmcq]

FYI, in this situation, no need to amend. Just pay the bill.

I would pay penalties & interest, and give them a discount off this year's return. And ask him not to bring the kids.