Would you do it?

[NotEasy]

I have a client who had a bunch of credit card cancellation of debts in 2011. That pushed up his gross income and makes it much higher than the past years. His son is trying to apply for financial aid from school now. He asks me if I can write a letter to the school and explain the extra income is cancellation of debts income, not his regular working income.

Would you write such a letter for your client?

[ToledoEd]

Yes I would. I would also explain that you can submit an explanation of unusual income on the FAFSA itself. And most colleges do understand that income goes up and down year to year.

[KathMorgan]

You betcha

I would sure do that if the taxpayer asked me. I've done thing like that for clients before at the request of the school. As long as you are keeping in mind confidentiality and due diligence rules you are fine.

[erchess]

Cya

I would word the letter carefully. I would never say that the client had or didn't have anything. I would say that his returns showed or he reported this or that. I would also point out that I do not audit the returns.

[geekgirldany]

I would think it would be obvious to the school if they looked at the 1040 that it is not part of the regular income. On line 20 I always put "cancellation of debt". Then again some of the financial aid reps are not the sharpest tool in the drawer.

[ChEAr$]

I would think it would be obvious to the school if they looked at the 1040 that it is not part of the regular income. On line 20 I always put "cancellation of debt". Then again some of the financial aid reps are not the sharpest tool in the drawer.

And that is precisely why there is no need for me to ever write such a letter. Client is able to call attention to that fact himself.