Client's college kid did his own taxes and "forgot" he was a dependent

[Anonymous]

A client's college son did his own taxes and "forgot" to click the dependent box.   He is definitely a dependent.   The 1098-T is significant in the parents' return and useless to the boy.  We discovered it when I filed his parents return and the IRS rejected it because the dependent had already filed an independent return.   I pointed it out to the parents and the boy e-filed an amended return and paid the difference (or Daddy did).  It is June 17 and this happened on May 5.   

I have continued to try to e-file the parents' return and it continues to reject.    What do they do?  File a paper return with a copy of the son's amended return marked COPY DO NOT FILE?  

[sjrcpa]

Parents file a paper return.

I would not bother attaching a copy of the son's amended return.

[abctax55]

The fact that the amended (kid's) return was efiled/accepted doesn't mean that the IRS has processed it.  Even efiled amended returns are taking months to process.

So either wait... or paper file the parent's return.   Whether attaching the kid's amended return would help, or not is debatable.   

Keep us posted.

[PATAX]

@Anonymous @abctax55 @sjrcpa I would also recommend asking the parents early next year that you will do Junior's return also... if they do not agree to this, then I would consider terminating them as a client. But that is just my opinion.

[abctax55]

@PATAX 

Yup... that's my m.o.   

I'll even snag the kid's W-2's & refuse to return them until after the parent's returns are efiled 🙂

THEN the kids will get their forms back & can go play around with TurboTax etc so they learn what the rest of their lives will be like.

[BobKamman]

"Asking" them, or "telling" them?

But that assumes that @Anonymous is not collecting a fee for helping with the mess.  Someone in business to make money, would allow clients to make their own choices about how much service they want to buy.  That's what separates the doctors from the tax practitioners, I suppose.  If your kid brings home from school a case of Covid, the doctor is not going to treat you for free.  But if your kid brings home a tax problem, your trusty tax preparer is supposed to fix it for nothing.  

It also assumes the kid is going to be in college next year, and still a dependent.  

[Alejandro · Accepted solution]

Hello there, 

This is how I proceed in such cases.  Mail the parents' paper tax return and provide the reason code on line 4 of the 8948 form (Preparer Explanation for Not Filing Electronically).  Once the IRS processes this return, they will be aware of the issue and confirm that the son filed a 1040X (as a dependent).  This also provides a paper trail confirming the tax return was timely filed, but rejected.  Since it is a paper tax return and there are issues to be clarified, this will take about 6 months for any refund.  Of course, this has generated additional time and effort on your part; charge accordingly or create goodwill by charging a nominal fee if any.  Gracias.  

[Anonymous]

That's exactly what I'm going to do.    Thank you, ALL of you.