My client forgot to give me the tax years 2018 and 2019 form 1099-s. Now IRS audited him and wants him to pay back a lot of money. Can anyone help me to solve this problem or advise?

[tpham141762]

My client forgot to give me the tax years 2018 and 2019 form 1099-s. Now IRS audited him and wants him to pay back a lot of money. Can anyone help me to solve this problem or advise?

Thank you.

Tyler

[Skylane]

Your phone number should be removed (if you don’t the powers that be will…

im assuming they received a CP2000? Not a full blown audit… the IRS is going to assume the entire amount is taxable. They’re wrong.

You are going to have to amend 2018 and 2019 returns to be able to correctly report basis info, etc. 

Be sure to charge them for straightening out the mess. 

[Just-Lisa-Now-]

1099S is for the sale of real estate, what did he sell?

Id venture to guess an amended return could help whittle that balance due down, since basis hasn't been accounted for on the 1099S.

Thats a rather long time for IRS to wait to send a notice about 2018, has this been going on for awhile and he ignored them until he finally decided to ask someone for help?  He may be in a tax court appeal situation already and might have to refer him out to someone experienced in that.

[abctax55]

Forms 1099 as in 1099-MISC or NEC (altho I'm not sure what year NEC came into the picture)?

** Advice = get a big retainer before starting as the process may be involved.

OR, 1099-S for 'sale' of real estate?

** Advice = listen to what Lisa & Bruce had to say as basis on real estate sales isn't reported to the IRS.

[jeffmcpa2010]

And for the REAL bad news - Might they be too late to amend 2018?

[BobKamman]

I think @abctax55 may be right, the question is about 1099s (also acceptable, 1099's) and not a 1099-S.  

I don't think IRS is still issuing CP2000's for 2018 and 2019.  More likely, they did that a year or two ago, and then followed them with notices of deficiency, and then assessed the tax, and the client is just now getting around to opening the mail.  

You don't file an amended return in response to a CP2000, you answer the notice by the date requested.

If the tax has already been assessed, you ask for an audit reconsideration, if in fact there was something wrong with the IRS computation.  Otherwise you pay the bill, or ask for an instalment agreement.  

[Skylane]

Not too late to amend