State Returns

[Chief]

I inerviewed a possible new client today who owns an apartment building in Chicago, Il and had owned it for many years. Her husband died in 2002 and half of it was started on a new depreciation. She said she would bring in the 2002 return. She is a full time resident of Florida. I expplained that she should file a NR Ill return for that income. What concerns me is that no other preparer has done that including CPA 's and the big chains. Of course she will not do that. Should I prepare the state return and give it to her? Also should I state so in a letter I give to her with he return.
Last year's return does not include any depreciaiton taken only the amount taken on Sch E.

[dyne]

If she will not agree to you preparing her returns correctly and filing an IL return, I
would not accept her as a client.

[ChEAr$]

State returns

If she will not agree to you preparing her returns correctly and filing an IL return, I
would not accept her as a client.

I will have to disagree with dyne on this one. Our job is not to force clients to comply with the law. Our job is to prepare returns for which a client engages us. Preparing a return
that client won't file doesn't get me off any "hook", cause there's none off of which to be
gotten. (huh?) (Like that, Bart?)

[JohnH]

I'm not sure those last few words form a thought up with which Bart will put.

[ChEAr$]

I'm not sure those last few words form a thought up with which Bart will put.

THANK you, Winston! (grin

[gkaiseril]

The issue is about an Illinois tax return being required. Since there is gross rental income, a return should be filed, even if there is a loss after expenses.

Illinois does fine for non-filing and late filing even if there is a refund. So there is a filing requirement that has a penalty.

You can try to explain to her that she has a filing requirement and what can happen if she does not file. Then the choice is hers. She can let you prepare the return and file it, let you prepare the return and ignore sending it in, or tell you not to prepare it. For the last option you can have her sign a service agreement that she does not want to prepare the Illinois state return and that she will prepare the form and file it or you can refuse the return.

[Edsel]

What Happened to Me

Alabama resident had owned an apartment in Minneapolis and sold it. I told client they had to file a MN return showing nothing else except capital gains on the property, as it was not only well-appreciated but also well-depreciated as a rental unit.

They had joint ownership with his cousin. Cousin was a MN resident and had been handling all the affairs for the property. They told me he had a CPA who handled everything and would have filed all the taxes for everyone. And they were simply NOT going to engage me to file a MN non-resident return, period. So I let them talk me out of it.

Four years later, after bickering with them for a year or two, MN tells them to pay $2500 or they will file court action to garnishee in Alabama. Client is furious and calls me. Their state, AL, allows a credit for taxes paid to other states, so they tell me now to file a return and claim the credit on their AL return. Wonderful idea, but the Statute of Limitations for the credit has expired.

Client gets hit for $2500 with no recovery anywhere, and guess who gets the blame??????

[luke]

edsel

just made Dyne's point for him......
Very "sticky" situation - I feel that my responsibilty (circ 230) is to TELL the client what SHOULD be done - if client decides NOT to do it, so be it (but of course I would hope that all contacts with "client" were well documented!)