You filed John Smith’s 2014 return on June 1, 2015. John forgot to give you the 1099 he received from his foreign bank account. IRS issues a statutory notice of deficiency picking up the missing income, fortunately, it is not a substantial omission of income. The Statutory Notice is dated May 25, 2018, a copy was sent to John Smith at his old freshman dormitory address. You know that the address on the Statutory notice does not match the address on the amended return you previously mailed in on his behalf. A copy of the notice of deficiency also was sent to your office since there is a valid power of attorney on file.

• In a memo to file discuss the possible outcomes of this situation?

• Discuss your ethical obligation under Circular 230 to advise the IRS about the error on the mailing address?

• What are you going to do? Explain the consequences of your proposed course of action.

Answer rating: 100% (QA)

Form 1099MISC reports miscellaneous income including payments made to independent contractors royalties earned and rent monies received 1 The possible outcomes on this situation are Failing to report ... View the full answer