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Can you explain what my accountant did with my 2006 1040?

It includes all the normal forms and a 8879 to file electronically, but there are a couple things I don't understand.

1) In several places on the 1040 he refers to statements. For instance, on line 21 'other income he entered "see statement 1". With my copy of the return there are about 10 pages with 30 statements; #1 lists two miscellaneous incomes. How did the IRS get those 10 pages? There was no 8453, so it couldn't have been sent in with that; could it have been sent electronically with the return somehow; or mailed in without a 8453? Or don't they need those pages?

2) There is a Schedule D and a D1, but they just contain summary entries, reducing the entire brokerage statements (with maybe 50 transactions) to one line each for long term and short term capital gains. (I have quite a few accounts...) In an earlier question I was told that the brokerage statements had to be mailed in with a 8453, but he did not do a 8453 and when I asked, he told me that the IRS didn't need any supporting documentation; the summary lines were adequate unless I was audited. So, is that an acceptable practice, or is sending in the supporting documentation on a 8453 absolutely required?

(I have asked him similar questions, but he just blows me off. This year I am doing my own returns, as 2008 will be much simpler.)

Reply to
mort
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Possibly. Many commercial tax preparation software packages have the ability to attach text messages, which become part of the e-file sent to the IRS.

You would have to ask your tax preparer whether the attachments were sent as part of the e-file.

If this is for 2007, only those attachments listed on he front of form 8453, and line 21 statements are not among those, are attached to form 8453.

As said above, the text statements could be attached to the e-file.

You, and also your tax preparer, are supposed to file (including e-file) a complete and accurate tax return. In my view that includes attaching the Schedule D-1 substitutes to form 8453 and sending all that to the IRS.

In my view, either include schedule D-1 in the e-file or attach to an

8453 and mail.

Waiting for the IRS to ask is not, in my opinion, filing a complete and accurate return.

Reply to
Arthur Kamlet

A number of commercial tax packages for the professional tax preparers automatically attach the statements as text files to the transmitted tax return. Your accountant may or may not be aware of that fact. (A good number of people are not.)

If not, the accountant is still responsible for the tax return preparation. If there is an audit, there is an expectation that the accountant is responsible to justify his/her work. There may be a charge to deal with the IRS on your behalf though. The accountant has furnished you sufficient information to justify his/her work anyway.

In general, I suspect that you have nothing to worry about.

Reply to
parrisbraeside

"mort" wrote

As others have mentioned, those most likely get e-filed to the IRS. I know mine do.

Pages of overflow documents that don't go to the IRS say, at or near the top, "Keep for your records" with my software.

I don't prepare incomplete returns. So I would have entered each and every sale in the Schedule D entry screen. That would generate the proper data set that goes to the IRS, which you'll see on the Schedule D and/or the D-1. Remember, the IRS doesn't get the forms as you and I might see them. The get a data packet.

I suggest that you also enter each sale in the Schedule D part of your software. Why you ask? Because someone at the IRS might make a data entry error from your attachments, your attachments could get lost or separated from your return, or I've heard of the IRS returning the broker statement with a blank Schedule D and D-1 for the taxpayer to do. Either way, you might have to deal with it later, so deal with it now.

If you prepare it, you know it's right before you send it in electronically. There's no need to send anything else to the IRS unless they latter ask for it.

Reply to
Paul Thomas, CPA

Thanks for this information.

Does the IRS allow such attachments only for commercial tax preparers, or can an individual also do it?

Steve

Reply to
Steve Pope

If the software package you are using has this capability, and it makes sense to attach a statement, then go ahead and attach.

This is all part of your task to rpepare a complete and accurate tax return.

Reply to
Arthur Kamlet

Thanks.

That definitely is on my checklist should I ever be shopping for tax software.

Steve

Reply to
Steve Pope

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