I am a CPA helping out a family member who has taxes due and in collections from 2018. After reviewing the return, I found out that they submitted a paper form with a litany of incorrect information. Mostly, not taking losses from a partnership of which they were a partner (I’ve checked basis and other loss limitation, so no issues there). They tried various other techniques over the years to amend before reaching out to me, all on paper and incorrect.
I’m looking for ways to reduce this tax due. Based on the amended return I drafted, they don’t owe any more tax. Naturally, the IRS won’t accept an amended return this late in the game, so what options exist for me to try to adjust the tax balance? Would I be able to do an audit reconsideration request even though there was no audit? Can I draft a DATL offer in compromise even though it’s related to an old return that should have been amended? I’m just not quite sure of my next step here.
Options to “Amend” 2018 Individual Return
byu/enthusedaccountant intax
Posted by enthusedaccountant
4 Comments
Why aren’t you filing that amendment?
There is no statute of limitations to reduce tax due, only to claim refunds.
>Naturally, the IRS won’t accept an amended return this late in the game,
Yes they will.
The statute of limitations is on refunds, not on accepting the return. You can always file a return that needs to be filed.
Wow, sounds like a tough situation with that 2018 return. I’ve dealt with a similar case where the client had incorrect information impacting their tax balance too. One thing you might want to consider is filing an audit reconsideration request. Even if there wasn’t an official audit, if you can show that the original return was incorrect due to substantial errors, the IRS might be open to reviewing it.
Also, double-check the statute of limitations regarding amendments; even if it’s late, providing clear evidence might help. About the DATL offer, those are generally for currently owed taxes, but given the circumstances, it might be worth exploring.
I know it’s a lot to navigate, but take it step by step. What kind of documentation do you have for their partnership losses?
If all you’re trying to do is reduce the amount of tax currently outstanding, and you aren’t claiming a refund, it shouldn’t be too late.
If they won’t process your amended return, an OIC-DATL is the way I’d go.