Two Problems

[erchess]

I am assisting a client with his self prepared individual return with which there are two problems. I want to know my best course of action.

The first problem is that his estimated tax payment is not being credited because he paid it through an entity and he didn't choose to file the return for that entity. I know that step one is to find out what is going on with the entity and whether it is the sort that can properly make an estimated payment that passes through to his 1040. Once I know that I can work on straightening things out and can respond to his IRS letter. There's no time pressure because the IRS letter agreed with him that he does not owe any tax since most of his income is nontaxable.

The other problem is that he did have a little bit of earned income and is entitled to a few dollars of EIC which he did not ask for and therefore did not get on the original return. I am inclined to treat this as a two step process and not raise the EIC issue until he has received most of the refund that he is due. Is that the correct procedure?

[Uncle Sam]

Two Problems

The first problem - for purposes of documenting credit for the estimate, it doesn't matter if a business entity's check paid for the estimate.
What you need to do - is obtain a copy of the cancelled check, and show IRS the code number stamped on the check. That will prove the payment.
The second problem - although I don't have an answer for you - you are correct in treating as two separate issues.

[erchess]

Revision of First Problem

He says he did not make an estimated tax payment and that his only payments in were withholding from a particular employer. I do not yet have a W2 from that employer but I do have the final pay stub. It shows much less Fed Wh than his return and on the other hand it shows a small amount of NC Wh whereas he claimed no payments for NC on his return. I have asked for but not yet received a copy of the W2 and an explanation for the discrepancies. I tried adding up all the withholding amounts on the ytd part of the stub and still came up with less than he claimed.

I think what I am going to do is re-interview him completely and this time make written notes which I shall retain. That way I will have basis to argue with him if he should subsequently tell me I misunderstood what he said.

[Bucky]

Why not get POA and use e-services to get transcript which would show w-2 etc.

[erchess]

There is a long story here

but the short version is that I am not now and will not in the foreseeable future be signed up for E Services.

[joanmcq]

ask for the backup worksheets; if he used TurboTax, the worksheet is called the tax payments worksheet and from there you can see exactly where he added the phantom payments.

Erchess, if you are going to be fixing a lot of DIY returns because they got notices, realize that anything and everything can be interpreted as an 'estimate payment' by a DIY'er including the 'I couldn't figure out where to put the amount I owed the IRS last year, so I put it there".

Also, if there is withholding supposedly from a 1099-B, its likely its wrong. And its likely they had some form of stock options.

Estimate, extention, payment with return....all the same thing why did the program ask me for it three times?

Its the program's fault. Its the IRS's fault. It's your fault. Its never their fault!