Trump's 1040 - $900,000,000.00 Loss?

[JohnH]

I think it might turn on the issue of what the intended purpose of the original return might be.
Falsifying information on a loan application is clearly prohibited.
But deceiving the public in the course of running for political office is normal and expected behavior.

[Rapid Robert]

Would that be a Circular 230 violation?

If only state returns are under discussion, not sure if Circ 230 applies, although state returns often depend on federal reporting. Might make an interesting court case, if push came to shove. I suspect whoever leaked these returns deliberately chose not to include the federal one.

[Rapid Robert]

Will you share how you avoided your billion dollar loss?

As usual, brevity is better. I should have said, "Losing a billion dollars does not sound very smart to me. "

[DaveO]

You're trying your best to turn this partisan, but it's a legitimate ethics question. Especially #3. If we amend a return, what responsibility do we have to ascertain for what purposes the original return was used? I never really thought of it before, but in theory a person could take less expenses on original return for loan purposes and then come to one of us for an amended return to lower tax.

I won't amend a return that I did not prepare. I will advise the client of the possible need for it but that's it.

[David1980]

I won't amend a return that I did not prepare. I will advise the client of the possible need for it but that's it.

That would put the taxpayer into a possibly difficult situation, no? Let's say my prior tax preparer died last year and as a result I end up having you do my taxes this year. In reviewing my prior return you notice some error and inform me I need to file an amended return. Me, as a regular taxpayer who relies on paying others to complete the forms has no idea what to do.

[JohnH]

That would put the taxpayer into a possibly difficult situation, no? Let's say my prior tax preparer died last year and as a result I end up having you do my taxes this year. In reviewing my prior return you notice some error and inform me I need to file an amended return. Me, as a regular taxpayer who relies on paying others to complete the forms has no idea what to do.

Every rule has exceptions. I don't amend other people's work either, and I agree with DaveO. Its a very wise policy to adopt. But that doesn't mean that I've never ever done it, or that I might not make an exception to my rule in the fiture. The ability to make distinctions is essential in business.

[kathyc2]

Every rule has exceptions. I don't amend other people's work either, and I agree with DaveO. Its a very wise policy to adopt. But that doesn't mean that I've never ever done it, or that I might not make an exception to my rule in the fiture. The ability to make distinctions is essential in business.

I always require new clients to bring prior year return and I look it over. If they overpaid I'll amend with their permission. It's quite frequent, I would guess 20% of time for individuals. Curious as to reasoning for not amending????

[Lion]

You are then responsible for everything on the return over your signature. You need to see the original documents, have a full interview re that year, etc. It takes as much time as any return, more since that return is not in your software. Hard to charge the client enough for your time and risk, especially since they feel they already paid someone else for that return.

Most of mine owe MORE (especially the DIYers) so often refuse to amend.

I have amended other preparer's returns, but prefer not to. I try to send them back to the original preparer or whoever now has those records, computer file, etc. If it's a new client, I might amend AFTER they've been with me for a season or two and paid for returns. I don't do amendments (or prior year returns) for anyone during tax season, unless it was my fault.

Your responsibility ends with telling them why they need to amend, the consequences of not amending. (Also, if a new client refuses to amend prior errors, I might not accept them as a client, but that's a different discussion.)

[DaveO]

I always require new clients to bring prior year return and I look it over. If they overpaid I'll amend with their permission. It's quite frequent, I would guess 20% of time for individuals. Curious as to reasoning for not amending????

I should not have used "never", it's more of a general rule. If it is something simple like they paid tax on an IRA rollover or failed to claim the CTC I'll do that. I had a new client in last week showing an $18k loss on a "C" from an MLM activity. The prior preparer did not calculate the NOL and he asked if I could do so. I politely declined. If the client wants to amend the return to claim additional expense it is pretty much a non-starter.

[JohnH]

You are then responsible for everything on the return over your signature. You need to see the original documents, have a full interview re that year, etc. It takes as much time as any return, more since that return is not in your software. Hard to charge the client enough for your time and risk, especially since they feel they already paid someone else for that return.

Most of mine owe MORE (especially the DIYers) so often refuse to amend.

I have amended other preparer's returns, but prefer not to. I try to send them back to the original preparer or whoever now has those records, computer file, etc. If it's a new client, I might amend AFTER they've been with me for a season or two and paid for returns. I don't do amendments (or prior year returns) for anyone during tax season, unless it was my fault.

Your responsibility ends with telling them why they need to amend, the consequences of not amending. (Also, if a new client refuses to amend prior errors, I might not accept them as a client, but that's a different discussion.)

I'm on board with everything Lion just said. That was a very good explanation of all the reasons to be cautious about amending.

For me, the reasons for amending a return prepared by someone else had better be overwhelming, First question is - Why won't the client go back to the original preparer? Sometimes the answer to that question resolves not only why I won't amend, but also whether I even want them as a client. But if there's a satisfactory explanation for that (death or incapacitation of the preparer, for example), then the next question revolves around whether the item amended is a slam dunk, and are there other potential issues on the return? Once you amend, you can find yourself owning all the problems.

Some people are very good at finding out that they need to say (or to omit) in order to change the outcome on a return. Then they change preparers and also change the facts. It's best to insure that you don't fall into that sort of trap.

[kathyc2]

Yes, I need all the docs as it I was originally preparing the return. As far as fees, I'm not real consistent. Sometimes I'll charge full prep fee + $50 for the 1040X, other times I'll only charge nominal. In all honesty, the fee might be determined by the mood I'm in. Sometimes I'll let them know what's incorrect to go back to original preparer, but on more than one occasion the amended return is still wrong!

There's one local preparer that when I see he did the prior return know it's more likely than not to be incorrect. Don't know how the guy stays in business! Last year I had a new client from this guy that had a W-2 as member of clergy. Prior year return had marked SE exempt from 4029, and when I asked client for a copy of exemption he had no idea what I was talking about and after I explained it to him, he decided to pick up his info and not have me prepare. More than likely went back to the idiot. As least he paid me for my time!

If I know I'm going to amend I would much rather do it before the current year return so I only have to enter the basic info like names, dependents, w-2 info once and then xfer the prior year info to current year.

[JON]

Preparer

I believe is 94 a lawyer living in FLA. If you saw page one the amounts were not from a computer printer, but typed in. The attorney said that the 1995 software would not accept that many digits so they had to white out and type the page one number in and change the totals. Losses where from mainly Schedule E (K-1s) so they were operating not capitol in nature.

[kathyc2]

I'm on board with everything Lion just said. That was a very good explanation of all the reasons to be cautious about amending.

For me, the reasons for amending a return prepared by someone else had better be overwhelming, First question is - Why won't the client go back to the original preparer? Sometimes the answer to that question resolves not only why I won't amend, but also whether I even want them as a client. But if there's a satisfactory explanation for that (death or incapacitation of the preparer, for example), then the next question revolves around whether the item amended is a slam dunk, and are there other potential issues on the return? Once you amend, you can find yourself owning all the problems.

Some people are very good at finding out that they need to say (or to omit) in order to change the outcome on a return. Then they change preparers and also change the facts. It's best to insure that you don't fall into that sort of trap.

Interesting. I've picked up quite a few clients when acquaintances question if they paid too much tax. I'll tell them to bring me the return to review and if I find they overpaid we'll amend and if not at least they will know it's correct. I can't remember any that involved Schedule C's but you have given me something to think about if a business is involved.