Discussion:Amending return and Minimum Tax Credit
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Discussion Forum Index --> Tax Questions --> Amending return and Minimum Tax Credit
| 22 November 2006 | |
| Here's a good one I'm stumped on. Amending 2003 tax return for client. The change caused elimination of AMT paid. So for 2003 he gets refund primarily because of eliminating AMT. HOWEVER, move to 2004 1040, he took a credit for AMT paid in 2003 with a partial carryforward to 2005 1040 where he took the remaining balance. So after amending all returns, for 2003 he is to receive a refund, for 2004 owes tax and for 2005 owes. Is there a way to have this all netted together. Can I use line 24 of 1040x to roll refund as estimated tax applied to 2004 and roll that to 2005? OR does he have to pay the tax due for 2004 and 2005 now and wait for refund from 2003? | |
| 22 November 2006 | |
| There is no law (that I know of) that states you must amend all affected T/Rs at the same time. The IRS has, I believe, 45 days to send the refund before they have to pay interest. So I would amend the 2003 T/R, wait for the client to get the refund and then amend the 2004 & 2005 T/Rs.
The risk, I guess, is that the IRS computers are set-up to figure out the MTC issue. Even if that is so, it would take time for the computers (or person) to generate the letters and send a bill to the client. So while not perhaps being the "perfect" timing like above, it would reduce the time that the client is out of pocket. The other possible risk is that you suggest the first course above and client agrees. However, after he gets the refund he refuses to sign the 2004 & 2005 amended T/Rs. You then have to think about firing an unethical client. | |
Bottom Line (talk|edits) said: | 26 November 2006 |
| Another thing to consider - If client gets the refund, is he responsible enough not to spend it and then cry poor pains when time comes to pay 2004 and 2005? | |
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