Amended return for HOH status

[mblatour]

Client is divorced as of Dec. of 2005. She filed her own 2005 taxes using Turbo Tax. I noticed that she deducted $2880 for lawyer's fees on Misc. Item. Deductions; which I thinking they might not necessarily be legitimate for the deduction she took. She's at work right now and I'll need to ask her if they pertained to tax advice or not. Her filing status she used was Single in 2005.

For 2006, she realized that she may be able to file HOH; so therefore wanted to hire a tax preparer (me, the one asking these questions, LOL). In order to get the divorce over with, she decided to sign over on Form 8332 her 7 year old son's dependency exemption and the child tax credit to her ex. She said that her and her ex have been separated since 2003 when she put out an order of protection against him. She has full custody of her son, and provides all of his home support.

I looked up in TTB the different scenario's and it looks to me that she may be able to claim HOH status and qualify for dependent care expenses (which she doesn't have) and EIC (which she makes too much for as a teacher).

I am pondering two things. Is she eligible for HOH status?

Secondly, if she is, I might look into amending her 2005 return to change status; and she may also be eligible for EIC for that year, as her income was lower. BUT, I am concerned about the lawyer's fees that she deducted; and don't know if I should draw attention to her return if she incorrectly deducted them. What do you think I should do?

[Bird Legs]

HOH status

Client would be eligible for HOH filing status.
Re: lawyers fees, you should tell the client what can and cannot be deducted and
let her decide what to do.

[mblatour]

what liability do I hold?

If I amend the return while knowing the attorney's fees may not be legit, do I have responsibility to the deductions part of the return, when I am amending only the EIC and the HOH status?

She looks to be able to get $597 more back from 2005 if I amend the return (but then again, if the lawyer's fees were improperly deducted, then that might have been wiped out). I like the idea of having her decide with the knowledge that she may have prepared her return wrong in '05. But still like when I can get client's more money; IF it's actually owed to them.

[ChEAr$]

For an amended return,

If I amend the return while knowing the attorney's fees may not be legit, do I have responsibility to the deductions part of the return, when I am amending only the EIC and the HOH status?

She looks to be able to get $597 more back from 2005 if I amend the return (but then again, if the lawyer's fees were improperly deducted, then that might have been wiped out). I like the idea of having her decide with the knowledge that she may have prepared her return wrong in '05. But still like when I can get client's more money; IF it's actually owed to them.

your duty is to preparer a correctly amended return, with the same care of preparation
as to facts on the original.

And unless she has an itemized statement from the lawyer telling what amount(s) are
purely for tax advice, no deduction. And I have never ever seen such a detailed
breakdown on any statement from any lawyer.

[taxea]

Amended return for HOH status

Only the portion of the atty fees that retains income is deductible. The atty should provide detail on request of client.
They know what portion is deductible. taxea