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1041 not required

A 1041 is not required.  Client applied for an EIN.   Probate was needed for 1 bank account. It earned cents in interest and the legal expenses were paid with the estate bank account (which was not a probate and reported on a separate 1041.)

Do you wait for an IRS notice and respond to it?  Do you file one return - Initial and Final?

Client has told me she wants "no loose ends" so it might not reflect well on me should she get an IRS notice. Thoughts?

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1 Solution

Accepted Solutions
IRonMaN
Level 15

Personally, I wouldn't do anything.  If by chance a notice does show up, deal with it at that time.  Just tell the client you don't want to have to create needless fees for her by filing a return that isn't needed.  There must be close to a bazillion and one EIN applications filled out every year that a return is not needed and never filed.  The IRS isn't going to waste their time tracking down every single one so I wouldn't lose any sleep over it.


Ukraine - hang in there

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2 Comments 2
IRonMaN
Level 15

Personally, I wouldn't do anything.  If by chance a notice does show up, deal with it at that time.  Just tell the client you don't want to have to create needless fees for her by filing a return that isn't needed.  There must be close to a bazillion and one EIN applications filled out every year that a return is not needed and never filed.  The IRS isn't going to waste their time tracking down every single one so I wouldn't lose any sleep over it.


Ukraine - hang in there
BobKamman
Level 15

Probate was needed, and then there was an estate bank account, but it was not a probate.  What is wrong with this picture?  Maybe the estate-but-not-an-estate was a trust.  Maybe whoever was in charge of that made an election under Section 645 and you don't even know about it.  Who is in charge here?  PR and Trustee are not the same person?  In any case, what @IRonMaN said.  IRS is not going to follow up unless they get 1099's showing enough income to matter.