Kiddie Tax, uncooperative parent

That’s too bad you don’t know where to draw the Line of Practicality…Let’s see. Kid is over the threshold by $10…let’s write the IRS...

I wasn't aware that the kid was over the threshold by just $10. Was that part of the fact pattern?

There is a big difference between (1) being "practical" and (2) intentionally omitting the 8615 and not disclosing its omission. The first one is fine, the second one isn't.

The thread is about which parent.

No, it's not. It's about how to get info for the parent with the higher taxable income (edit: the father in Nebraska, there was no question that he was the correct parent).

" Parents were not divorced that particular year but filed separately. ", according to previous post.

It's a 2015 return.

I realize that. My comments in Post #45 were unrelated to the facts of the OP, but were directed at the comment made by MissingDonut in his Post #44…where he said he is governed by the SSTS, and because of that, he could not avail himself of this method. If that is the case – a strict adherence to the SSTS – then you must hold fast to them for a $1 tax difference just as you would a $1,000 tax difference. No if’s, and’s or but’s about it.

I wasn't aware that the kid was over the threshold by just $10. Was that part of the fact pattern?

No, it was part of my hypothetical (Post #45). Comment was directed at your strict adherence to the SSTS…and with that hypothetical, I would expect that you would do all of the things I mentioned, for $1 in tax difference, given your position.

There is a big difference between (1) being "practical" and (2) intentionally omitting the 8615 and not disclosing its omission.

Usually not, as explained at the bottom of Post #27. The taxpayer is not omitting one dime of his own income. What he might be omitting is income from an uncooperative third party. IRS (and any State Board) could care less about doing anything to a practitioner in a peanuts case like this, if you are suggesting that they might. And if they tried to, they’d be in for a big fight.

" Parents were not divorced that particular year but filed separately. "

Thanks for confirming my statement.

Doug, my client has not remarried. I would assume my client is not the custodial parent, only because we have not claimed her daughter on previously filed returns, but I haven't confirmed that. The Mother became my client 3 years ago, this is the first I've heard of a daughter. I wonder if she has emancipated.....

I didn't mean to stir up a hornet's nest, I merely want to do right by the client and the IRS, if at all possible. I'll keep you posted...

I wasn't aware that the kid was over the threshold by just $10. Was that part of the fact pattern?

No, it was part of my hypothetical (Post #45). Comment was directed at your strict adherence to the SSTS…and with that hypothetical, I would expect that you would do all of the things I mentioned, for $1 in tax difference, given your position.

where he said he is governed by the SSTS, and because of that, he could not avail himself of this method. If that is the case – a strict adherence to the SSTS – then you must hold fast to them for a $1 tax difference just as you would a $1,000 tax difference. No if’s, and’s or but’s about it.

Ahh, so after I write a response, you created a different hypothetical situation to argue against. It sure is easy to knock the straw out of that scarecrow, isn't it?

SSTS allows estimates to be used. If I had a situation in my practice where the kid was exactly $10 over the kiddie tax income threshold and the proper parent's income was unknown, I would prepare the return with an estimated 8615 and move on without hesitation. Such a filing would give the IRS proper notice of the situation.

What I would not do is to intentionally and knowingly omit the form.

IRS (and any State Board) could care less about doing anything to a practitioner in a peanuts case like this, if you are suggesting that they might. And if they tried to, they’d be in for a big fight.

So at what dollar amount threshold am I safe to ignore professional standards?

It sure is easy to knock the straw out of that scarecrow, isn't it?

You said what you said, so don’t disavow it after the fact. Here it is again, your words:

Unfortunately, I am governed under SSTS and couldn't avail myself of this method.

If you take this responsibility so seriously, then it doesn’t matter if dollars are big, small or tiny. It’s principle, you say.

And as to this:

I would prepare the return with an estimated 8615 and move on without hesitation.

There is no basis on which to make an estimate here. So whatever estimate you come up with has as much justification as an estimate of $0. As an additional attempt at compliance, it has been offered up to use mom’s tax return information.

So at what dollar amount threshold am I safe to ignore professional standards?

You have to use professional judgement, hence the difficulty that a strict and absolute constructionist faces in attempting to answer it. Your “principled” position has left zero room for professional judgment.

You said what you said, so don’t disavow it after the fact.

What I absolutely cannot avail myself, due to SSTS, is intentionally omitting an 8615 when one is required. It is neither a reasonable tax return position nor is the position properly disclosed. Which has been my position the entire time. To imply that compliance under SSTS requires what you wrote in post #45 is absolutely a misrepresentation of everything I had written up to that point.

There is no basis on which to make an estimate here. So whatever estimate you come up with has as much justification as an estimate of $0.

Hogwash. If the requirement is to use the higher AGI of the two parents, we know that the estimate has to be no lower than mom's tax return. Unless mom has an AGI of $0 or less, an estimate of $0 would have no justification.

As an additional attempt at compliance, it has been offered up to use mom’s tax return information.

Which is not the worst idea in the world. This would be an estimate, which is fine under SSTS. Knowingly omitting the 8615 would not be.

What I absolutely cannot avail myself, due to SSTS

If you feel compelled to strictly follow the SSTS in all cases, that’s your decision. I myself think certain things are unimportant, trivial, pissant, not worth my time and not worth my client’s trouble.

This would be an estimate, which is fine under SSTS.

It’s not really a reasonable estimate, however, since we’re guessing that mom’s income is greater than dad’s.

If the requirement is to use the higher AGI of the two parents, we know that the estimate has to be no lower than mom's tax return.

I was speaking in terms of estimating dad’s income, which we can’t.

I myself think certain things are unimportant, trivial, pissant, not worth my time and not worth my client’s trouble.

I think the same thing; I just don't see knowingly omitting a required tax form without disclosure as "trivial" or "pissant"

It’s not really a reasonable estimate, however, since we’re guessing that mom’s income is greater than dad’s.

It's more reasonable than saying that the estimate is $0, or omitting the 8615 altogether.

I just don't see knowingly omitting a required tax form without disclosure as "trivial" or "pissant"

If the properly completed form will change the tax by a few thousand bucks at most, then I’d say that’s pretty trivial…I’m practical. I’m using the tax amount as the metric here. You’re using the Form as the metric, and in doing so, placing unnecessary importance upon it.

The fact is…lots of people don’t file certain forms, including Page 1 and Page 2 of Form 1040. If it turns out they owe $1,000, they’ll be assessed. Big deal.

It's more reasonable

Maybe so. But the law is the law and there is, apparently, only one standard: Report the information. Nice tries don’t count.