1040X

[JamesKirkl]

After efiling1040 for a client I realized that by mistake I doubled his mortgage interest on Sch A. Unfortunately client refuses to sign Form 8879 to authorize an amended return to correct the mistake. What to do?

[Just-Lisa-Now-]

all you can do is advise them that a mistake has been made and that it should be corrected. If they choose not to correct it, then they can deal with IRS on their own when it catches up with them.

[jeffmcpa2010]

You could prepare a paper 1040X  and provide it to the client to mail in, along with a letter including instructions on how to file.

Were it I, in the letter I would make it clear, that should they decide not to file the amended return to correct the error on their return, they would be choosing to terminate the relationship with me, and that I would not be able to provide tax services to them in the future, if they were unwilling to take all the necessary steps to make sure that their returns were filed correctly.

Tough situation, best wishes on a good result.

[IRonMaN]

Yeah, my mistake so I complete a 1040X and give it to the client ---------------- and then don't invite him back next year.

[jeffmcpa2010]

He can come back if he wants to file his taxes correctly...If he is unwilling to KNOWINGLY correct an error...Not the type of client I wish to work with or be associated with.

And I clearly indicated how I would handle the situation - not recommending it to the OP.

Time to go fishing...

[IRonMaN]

I'm getting too old to babysit or fight with clients.  When we get to the part that client "refuses", I'm done.  Life is too short to have to deal with that kind of nonsense.  

[BobKamman]

So he comes to me next year and I look at his 2020 return and notice the mistake, if he hasn't already told me about it.  Do I play Enforcer?  Do I tell him that I won't do his 2021 return until he coughs up some taxes he owes IRS?  What if the next new client brings in a 2018 return with an obvious error?  Do I demand that he file an amended return?  Is my obligation to the client, or to the government?

You made a mistake.  Tell him, and offer to correct it for no additional fee.  Explain how the CP-2000 program might not catch up with him for 18 months, if the tax involved is significant.  If you're not comfortable working with him next year, that's your choice.  Filing an amended return, is his choice.  

[IRonMaN]

But every now and then it feels good to put on those brass knuckles and play the part of the enforcer 😉

[abctax55]

I would proactively document the hell out of the fact (certified mail? ) that the client has been informed of the need to amend and that any additional penalties & interest assessed 18 months from now when the IRS notices the error are the client's responsibility.   

You are responsible for the penalties & interest up until the preparation of the 1040X for filing (since the error was yours).   I might even consider cutting a check for those, and send it the client with the 1040X.  (Depending on my level of paranoia & the amounts involved...  🙂

[BobKamman]

I don't think you mean what you think you mean.  You are not going to send him a check for the 20% Section 6662 penalty if the tax underpayment is more than $5,000, are you?  

[abctax55]

argumentative today, eh?

I'm done.

[garman22]

Yeah, if thats me, I am explaining the situation and telling him/her I am NOT covering penalties/interest. 

Id cut my nose off to spite my face on this one. I would probably NOT want the client back either. 

[abctax55]

That isn't what I said.

[JamesKirkl]

As a matter of fact the amount involved is about $1,000.

[JamesKirkl]

The truth is that I had to transfer the client from Turbotax to Proseries and the following error happens during the transfer. If there is an entry in Turbotax on Sch A line 8(a) ("Home mortgage interest reported to you on Form 1098"), when the return is transferred from Turbotax to Proseries, Proseries erroneously transfers the amount of interest on the mortgage on Sch A twice: on line 8(a) which is correct and then the same amount on line 8(b) ("Home mortgage interest not reported to you on Form 1098).

So, in fact it was not even my mistake but an error in Proseries which still has to be fixed. I had other clients with similar transfers and I had to manually correct the situation but for this client I missed it.

[IRonMaN]

"but for this client I missed it"

So it sounds like it is your mistake 😁