1099 Deductions

[CJ_SFS]

I recently lost a client over this issue, and I want to double check whether I’m in the right or not.

The client wanted to deduct money they sent overseas to family for financial support from their self-employed income having received 1099-NEC’s (they also received a few W-2’s). This would’ve been for Form 2106 / Schedule SE. The amount of money they sent (some of it went to their family members’ schooling, some just for their family’s living expenses) totaled around $42,000. Since I couldn’t think of a way that “expense” was an expense for their job, I didn’t feel comfortable adding that to their return. So they went with another tax preparer who would add it (incidentally, their AGI dropped from $116k to $26k when that amount is added in and the other tax preparer calculated their income). Our client mentioned that their new tax preparer didn’t include all of their W-2’s and 1099-NEC’s since some of them totaled less than $10k. Can someone clarify who is in the right here? If you need more information, I’m happy to provide. Thanks in advance!

[IRonMaN]

I don't know that you have your form numbers quite right but you have the right idea that those payments are not business expenses or other tax deductions.  If another tax preparer took those deductions I would call the IRS tip line and squeal on the tax cheats.

[George4Tacks]

From your description, you are absolutely correct.

There are many tax preparers that but anything the client wants on the tax return.

There are many tax preparers that invent totally bogus numbers to inflate a refund or reduce tax due, just to make themselves "look good".

There are many tax preparers that will do anything to make the client happy, especially when they charge a high fee because they "specialize in this type of thing".

Keep doing what you are doing.

[sjrcpa]

In the long run, that is a client you are well rid of.

[TaxGuyBill]

I'm suspecting that the preparer didn't sign the tax return either.

Interestingly, the IRS email from today seems to fit this situation fairly well.

https://www.irs.gov/newsroom/dirty-dozen-irs-warns-individuals-to-stay-clear-of-shady-tax-preparers-...

[qbteachmt]

Using business money for family or for personal, is never business expense. It's cash flow. It's just money out. You did fine.

[itonewbie]

But the last time I went for my haircut, my barber told me...  Oh, never mind.