Wrong name on the top of Sch C

[HOPE2]

Hi to all. I received a tax return for 2022 just for a review from new client. 

I see on the top of Sch C instead of wife's name as a name of proprietor, the name of husband. What the best way to correction of this mistake. The return already e-filed.

[dkh]

Hi @HOPE2     

Does changing the Sched C to name of wife change the tax liability ?  Does the wife need the income reported under her SS# for SocSecurity credits ?   If the answer to each of these questions is NO - I personally would not amend just to change ownership of the Sched C.     

[HOPE2]

Thanks, sole prop is belong the wife and Sch C filled out per her job but the tax pro forgot to mark Spouse part on Sch C instated he marked husband part and husband first last name named on the top of the form. Husband has his own Sch C in the return as well.

Does changing the Sched C to name of wife change the tax liability ? 

No

Does the wife need the income reported under her SS# for SocSecurity credits ?

Yes

[PATAX]

First, is it possible to even file a corrected or amended return if absolutely no numbers have changed? I do not know the answer to this, I am just asking. The second thing to consider, which is just my opinion, is that a corrected or amended return may be apparently manually reviewed, which therefore may apparently increase the chance of the client being audited, especially since you stated there are two Schedule C forms on the return. This is just my opinion, I may be wrong, and you do what you want to do.

[dkh · Accepted solution]

Sure you can amend a return with any amount changes.  Just complete Part III - Explanation of Changes and attach corrected Schedule C.

Shouldn't raise any audit flags.  Clients can legitimately have two separate business -  one ran by the husband and one ran by the wife 

[PATAX]

Thanks dkh for that information. I appreciate it. What I was referring to about a possible increased probability of audit risk was that there may be something on the return itself, e.g. the percentage of a specific expense may be disproportionately high for that particular type of profession or industry.

[ljr]

Had this happen with a new client before. Do the current year correctly. Even if you do not have a tax change for it to be on her social security statement you have to amend. Although we found out that this does not automatically adjust her social security earning statement. There was form that needed to be filled out as well. If I can find the form I will update the post.

[IRonMaN]

Out of an abundance of curiosity, what was the net income reported on the schedule C?

[HOPE2]

Thanks for 2022 it happened. And should be corrected since the POINT which she can get is 4 for $7200 net income. Please send me a link regarding the form you mentioned. If you mean addition making an amended we need to fill out the other form let us know what it is. I am interested.

[HOPE2]

$7200

[HOPE2]

Please do not make a far scenario. Let me know are you filing a Sch C which included  inappropriate expenses  ($65000) against a $100 net income . Come on!!!! If you do it ready to be audited.

do not make overthinking and pray the LORD help us to think and live well.

[abctax55]

At the risk of the obvious... what SSN was on the Sch C?  The 'name' isn't what matters.

AND, yes if the wrong SSN was used an amendment is needed.  Even if the 40 quarters has been met without this income, getting the income posted to the correct person for future benefits is important.  

There's no guarantee these two folks will still be married come retirement time.

[PATAX]

@HOPE2 Please go back and reread my post very carefully, and you will see that "inappropriate expenses" were never mentioned, nor was it inferred. What I was referring to was the fact that the IRS uses percentage/ratio analysis techniques that may lead to an audit, even if the figure(s) are completely legitimate. For example, years ago at a seminar a tax professional mentioned that one of his business clients was audited because the IRS felt that there should be more in cash sales based on the 1099-K information (and the industry/profession that the business was in). His client did not have much in cash sales because his client only had a few customers who would almost always pay via credit. But the IRS did not know that before his client was chosen for audit. Have a nice day.

[abctax55]

@HOPE2 

You are giving *yourself* a solved on this?  Really?

[abctax55]

Thanks, Lisa.

[HOPE2]

I corrected but thanks.