Level 4

1065 error

Forum|Forum|5 years ago
July 30, 2020
3 replies
7 views

I have a client who came to my office to amend form 1065. After checking and doing my "Due diligence" I found out that his partnership taxes for 2018 and 2019 were filed wrong as he ended his partnership on 2017. Now here my question.

If he already filed his tax return and made the mistake of filing it as 2 member LLC. when I know he should have filed as a sole proprietorship. How can I fix this. Just to mention that it was filed wrong for two years 2018 and 2019.

Thanks

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

How'd he file a 1065 if there was only 1 person?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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thegoodbrotherbrokersAuthor

Level 4

He kept the second partner one year with 0 % and the best year he used himself one with social and the second as a foreigner because he was told he have to file as partnership 1065

sjrcpa

Level 15

???

The more I know the more I don’t know.

George4Tacks

Level 15

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thegoodbrotherbrokersAuthor

Level 4

Proseries Pro

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Terry53029

Intuit Community Champion

Sounds like your client prepared his own taxes, not that it changes anything. As I'm sure you are aware that you only have to file this years taxes correctly, and point out the error to client. He will decide if he is going to correct the errors. Don't know if this is correct, but if it were me I would amend the 1065 that ended the partnership, and mark it as final. I would then amend the 1040 for the incorrect years, by adding a schedule C and removing the K1 on 1040X, and explain the change. Just my 2 cents. 😁

sjrcpa

Level 15

So far so good. What would you do about the 2 bogus 1065s that were filed? And did this made up foreign partner get a K-1?

The more I know the more I don’t know.

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Terry53029

Intuit Community Champion

With the new auditing rules that took effect 01/01/2018 affecting partnerships under 100 partners, I doubt the Irs would try to assess any penalties as long as all profits and income was reported on schedule C. I would count on the amended 1040 would be sufficient. In fact prior to 2018 a small partnership (under 10 partners) did not even have to file a 1065 see Rev. Proc. 84-35. Almost forgot the "foreign partner" would have to see what he put down, as that could open a can of worms. That is the trouble with answering questions here, as all of the facts are never known, and knowing the exact and complete picture can change your answer

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