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Can tax preparer work on just a single complicated aspect for you?

Posted: Tue Jan 28, 2020 10:23 pm
by lassevirensghost
Hey all,

My wife inherited a small family farm about 7 or so years ago and we have always had to file a Schedule K1 with our taxes. We usually self-prepare. This past year, though, the siblings who inherited the farm collectively sold it and the partnership liquidated.

The letter from the K-1 preparer says that the "[partnership] is an eligible small partnership and has elected out of the centralized partnership audit rules in accordance with Proposed Regulation 301.6221(b)-1. As a result the IRS will be required to open deficiency proceedings, adjust items associated with this partnership, resolve issues, and assess and collect any tax that may result from the adjustments at the partner level."

First of all, that is a bit jargony for me. I don't fully understand what that means. But second of all, years past only a few boxes of the K1 were filled out and it was really easy to self-file through TT. This year the complexity has gone up and I am not sure I can accurately do it.

If I just need this form figured out for me, is it possible to have a tax preparer do just this part of the job? I don't need everything to be done for me, unless they do all-or-nothing.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Tue Jan 28, 2020 10:41 pm
by Makefile
I don't have enough background on preparers to know how they would handle that, but it sounds like you might be a candidate for filing an extension/tax payment based on the best estimate you can make now and possibly seeing a preparer after April 15th when you'll be able to get more of their attention.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Tue Jan 28, 2020 10:52 pm
by spectec
I'm a tax preparer and I wouldn't do it. Most of the ones I know would also refuse. Generally the fee someone is wiling to pay for a partial job isn't worth the effort, and there are potential liability issues for the preparer. There are other reasons but those two are the top of my list.

But if you search around you might find someone willing to stick their neck out.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Tue Jan 28, 2020 10:55 pm
by AlohaJoe
lassevirensghost wrote: Tue Jan 28, 2020 10:23 pm If I just need this form figured out for me, is it possible to have a tax preparer do just this part of the job? I don't need everything to be done for me, unless they do all-or-nothing.
Couldn't you just call one (or a handful) and ask? That's seems like a simpler way to get the answer than asking on Bogleheads. What if Bogleheads say "yes, they will do that" but then you call three of them in your area and they all say "no, I won't do that"?

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Tue Jan 28, 2020 11:11 pm
by veindoc
I wonder if this year you just have an accountant take care of the whole return. If you provide copies of previous returns the man-hours would be greatly reduced and it may not be expensive.

If you don’t want to do that, try turbo tax. Don’t they have live chat or some other mechanism that allows you to talk to an accountant as you prepare your return. I recall seeing that in the the commercial. Yes the document is jargonu but I imagine it is still fairly straightforward. I have been flummoxed by certain items in the tax code only to have my accountant distill the issue in 2-3 sentences.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 12:12 am
by tfb
lassevirensghost wrote: Tue Jan 28, 2020 10:23 pm The letter from the K-1 preparer says that the "[partnership] is an eligible small partnership and has elected out of the centralized partnership audit rules in accordance with Proposed Regulation 301.6221(b)-1. As a result the IRS will be required to open deficiency proceedings, adjust items associated with this partnership, resolve issues, and assess and collect any tax that may result from the adjustments at the partner level."

First of all, that is a bit jargony for me. I don't fully understand what that means. But second of all, years past only a few boxes of the K1 were filled out and it was really easy to self-file through TT. This year the complexity has gone up and I am not sure I can accurately do it.

If I just need this form figured out for me, is it possible to have a tax preparer do just this part of the job? I don't need everything to be done for me, unless they do all-or-nothing.
It means _if_ the IRS finds any issues with the partnership, they will come after the partners. The letter just says be prepared for this possibility, not that something will definitely happen. When you use TurboTax, after you fill in all the boxes as-is from the K-1, what happens? It may very well just take it from there with no issues. If you really need help, you can upgrade your TurboTax to TurboTax Live for an additional charge. It lets you consult a tax professional when you both look at the same screen.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 12:13 am
by Tamarind
I imagine a preparer might be unwilling to fill out just a small portion of a return you were then going to submit. Liability etc etc.

But I've had success in the past offering a preparer an hourly rate to advise me on the meaning and implications of particular events/forms/changes in tax law. They can set a rate that compensates them enough for time spent and you can ask questions and learn to fish. Maybe offer this to a small group that does a lot of work w family farms?

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 1:52 am
by Flora
The statement means that the partnership is electing out of the centralized partnership audit regime (CPAR) and that is generally a good thing. Any audit is at the partner level instead of the partnership level.

Consider asking the person who prepared the partnership return about a fee quote for your 1040. Also ask the siblings what they did (self-prepare or tax professional).

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 2:43 am
by manatee2005
I wouldn't do it, it's not worth a lawsuit if I don't know what else was in your return.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 7:29 am
by Stinky
veindoc wrote: Tue Jan 28, 2020 11:11 pm I wonder if this year you just have an accountant take care of the whole return. If you provide copies of previous returns the man-hours would be greatly reduced and it may not be expensive.
Tamarind wrote: Wed Jan 29, 2020 12:13 am I've had success in the past offering a preparer an hourly rate to advise me on the meaning and implications of particular events/forms/changes in tax law. They can set a rate that compensates them enough for time spent and you can ask questions and learn to fish. Maybe offer this to a small group that does a lot of work w family farms?
Sounds like one of these two approaches should work.

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 7:33 am
by ARoseByAnyOtherName
I would have a tax preparer do the whole thing for me this year, and submit the preparer’s work. BUT also do everything else myself and look at it as an opportunity to see if I’m missing anything. Maybe the tax preparer will take advantage of things you’ve overlooked!

Re: Can tax preparer work on just a single complicated aspect for you?

Posted: Wed Jan 29, 2020 11:13 am
by neoptolemus412
ARoseByAnyOtherName wrote: Wed Jan 29, 2020 7:33 am I would have a tax preparer do the whole thing for me this year, and submit the preparer’s work. BUT also do everything else myself and look at it as an opportunity to see if I’m missing anything. Maybe the tax preparer will take advantage of things you’ve overlooked!
Exactly the course of action that I tell suggest to most clients. Rather than look at the cost, it’s a great opportunity to hire an accountant to perform the 2019 year return and run some projections. Map it against your personal return. We’re talking less than $500 for peace of mind, which is worth it to have someone knowledgeable about preparing more complex returns give it a once over.