Our tax "guru" for the past 20+ years said he was sick and recommended a new firm and with our OK, he transferred our information. He died shortly after that.

Today, we had our first meeting with the new tax group.

"How long have you been blind?"

Huh?

For the past 10 years, our previous accountant had me listed as blind on our tax forms. We went back thru each return and verified that block was checked.

We will file amended returns and sit back and wait. If there are any penalties, we will have go after the estate of our previous tax person to recoup them.

Me? I wouldn't say a word unless they audited me.

Then I'd show up with dark glasses.

I'm betting your new CPA is a little more ethical though.

Didn't see that coming.

How old are you? Maybe it's time for cataract surgery. That would explain the "cure."

Most though not all accounting firms have insurance that covers errors and omissions. Let us know what happens.

quote:

Originally posted by .38supersig:
Didn't see that coming.

I see what you did there.

quote:

Originally posted by 12131:
I see what you did there.

Well then, you're better off than the OP!

Did you take the standard deduction or itemize?

I don't believe being blind in and of itself has any major impact on your taxes other than it allows for other deductions that the non-blind can't take. A guide dog for example.

It does provide a slightly higher standard deduction, but if you itemized you were were likely beyond that threshold anyway.

Come on, dude. Did you not sign or get a copy of the tax returns that were sent?

If I get something back, I scan it for the non-boiler plate items.

What are the limitations periods on these?

Or, social security owes you a disability backpayment.

quote:

Originally posted by jhe888:
What are the limitations periods on these?

Three open years IMO. Unless the IRS were to assert that it was fraud, which IMO opinion is not likely.

OP could also possibly request a "First time abatement" on the penalties if he/she has a clean history. Only usable one time so would use it on the year with the highest penalty.

quote:

Originally posted by Sailor1911:

quote:

Originally posted by jhe888:
What are the limitations periods on these?

Three open years IMO. Unless the IRS were to assert that it was fraud, which IMO opinion is not likely.

OP could also possibly request a "First time abatement" on the penalties if he/she has a clean history. Only usable one time so would use it on the year with the highest penalty.

I had a similar situation where my former accountant of many years retired and sold his practice to "Bob"....Bob seemed more than qualified and my taxes are not that complicated however on year 2 of using him he made a huge error that, admittedly I should have caught, and it cost me a lot of money, stress and headaches. I pled my case to the IRS and they did waive any and all penalties which was a huge help.

I had an accountant that made a large (and stupid) error one year, that could have been costly. I didn't even discover it until about 5 years after the fact, and the whole thing is fifteen years in the past now.

I think I'd just correct it on a go forward basis and if they contact you regarding the change then invest in refiling the past returns.

I hope your new advisors told you that the statute of limitation is generally 3 years for fed and 4 years for states. It would be very hard to believe this would be significant enough to trigger the 6 year statute.

Questions
Did your prior accountant provide you with an annual booklet to accumulate tax data or with a set of questions that you answered? If yes, look to see if this question was addressed. If you gave your accountant something where the 'yes I'm blind box' was checked, they it will be hard to get out of penalties.

Did you ever meet face to face with your prior tax person? If yes, did you show up with dark glasses and a cane? Ok, I already know the answer is NO

Normally the IRS does not assess penalty when a taxpayer amends a return. If penalty is assessed then you can go one of two routes:

> Use the first time abatement option (this is a second choice)

> Request abatement under reasonable cause.

The ideal reasonable cause letter would read as follows:

Attached is a copy of the relevant page from the information I provided to my accountant for the last 4 years. I've circled where I indicated that I was not blind. Further, I met with my advisor at least once a year for the last x years and he knew, or should have known, I was not visually impaired because we reviewed documents during those meetings.

I relied on my advisor who had the following credentials [hopefully something like CPA or EA] to prepare my return accurately.

My prior accountant passed away and my new accountant discovered the error. I promptly corrected the error.

I've acted in a prudent manner and believe I meet the requirement for abatement under the reasonable cause standard.


But again, if you amend you will probably not get a penalty.


Want more information. Here's a link to the IRS Manual. Use the search feature on your browser (or CTR F) and search for 'reasonable' You'll come to a section with the heading Reasonable Cause. Start reading at that point.

I am glad you are on the forum. Your written communication skills are superior. Well thought out cogent response.