TIFU By offering to do my ex's taxes for her

Submitted by Greninja7872 t3_123dxqu in tifu

Pretty much the title. We broke up a few months ago but I am waiting until the end of the semester to move out. She absolutely REFUSES to do anything where she even has to look at numbers, and I am trying to keep as neutral an environment as possible while I am still living with her so I decided to offer to do her taxes as I usually did while we were together. The only income she has is a W-2 and she does one class per semester at a local community college. She kept asking me to do them for her but didn't want to get her other tax forms such as 1098-T, check her bank for a 1099-INT, school receipts, etc.

It took a while, but she finally threw all her paperwork at me while I was studying for an exam earlier today. Upon doing her taxes for her, I discovered that her employer gave her a bonus, but didn't withhold any taxes on it. Meaning the majority of her refund went to paying her taxes. After FreeTaxUSA fees ($15) her refund came out to $20 dollars. She has an EXTREME overspending habit (literally drains every paycheck she gets within 2 days) so when I explained the situation to her she was angry as hell and accused me of sabatoging her refund to get back at her (even though I broke up with her? ).

I told her to pull out her phone and show me the deposit for her bonus. Sure enough it was a whole $3500 dollars and zero cents. She then told me that "Since it's a bonus it shouldn't even be taxed in the first place. I think my work knows more than you do so clearly you entered it wrong. You just need to take the bonus out when you enter it" (so her idea was that if it was supposed to be taxable, herwork would have withheld taxes on it). I told her that just because it's a bonus that doesn't mean it's tax-free, yet she still insisted that I report her income as less than it actually was. I told her that there was no way in hell I would knowingly prepare a false tax return (I'm an accounting student currently working for a CPA firm which primarily focuses on tax). And she told me that she would just do it herself later. I am now terrified that she is going to lie on her return and tell the IRS that I prepared it when she gets audited. I do volunteer work for VITA and it is really important to me. If I get caught up in this I am worried I won't be able to volunteer for VITA anymore; not to mention the whole boatload of other issues I will be facing.

TL;DR I offered to do my ex's taxes for her and since she received an untaxed bonus from her employer earlier in the year, most of her refund went towards paying taxes on the bonus. She was angry that she didn't get more money and told me she would just do it herself later. I am now terrified that if she gets audited she is going to tell the IRS that I prepared the return.

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Greninja7872 OP t1_jdub6jt wrote

Replying to Yellow_Dorn_Boy (#2,386,011)

I asked her to write down her intentions but she refused (probably because she knows it'd be used against her) so right now I'm thinking my only defense is her preparing it on her own password protected laptop that I have zero access to. I started the return on my computer, but if she sends it through on her own, I think that will help. I'm also getting out of that apartment ASAP because I am genuinely terrified of being caught up in this shit storm.

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Yellow_Dorn_Boy t1_jdubuvk wrote

Replying to Greninja7872 (#2,386,055)

You write her a mail stating all of the above, that you agreed to help her fill her taxes. You prepared it correctly according to your knowledge, and that you advise her to declare the bonus received.

If she doesn't, she would take over against your advice and you would stop assisting her, as it would be a false declaration of income.

She doesn't have to answer, you just need to keep this mail very carefully, as well as evidence of the prepared tax you did, including the date.

Think of it as if you were an accountant with a mission to prepare your taxes, and your client wants to take over against your advice. That would be a breach of contract and you would not be responsible anymore, as from the date you notify your client that their action caused said breach of contract.

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mck-_- t1_jduc4vr wrote

Can you report the conversation to the IRS? Have it be on record that she tried to get you to do this and you refused so if it does get submitted you can tell them you reported it? It might sound petty but ruining your career for her would be monumentally stupid.

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xopranaut t1_jdufat0 wrote

Send this explanation to the IRS. If she does commit tax fraud you will have covered yourself and protected your future.

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ijustwantaredditacct t1_jdufpfg wrote

Talk to a lawyer (that you pay) rather than anyone on reddit. I'm not suggesting taking any action after talking to a lawyer, just get a professional consultation and go from there.

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TDP_Equinox t1_jduhgme wrote

If you're in a one party consent state, record every conversation you have with her, and try to get her to state her intentions herself.

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Premisetech t1_jduhv6y wrote

Did you sign the form as a paid preparer? If not, that is on her.

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Mediocre_Ant_1638 t1_jdui9ds wrote

Look, from what you're saying, online system yes? If so, then system saves what you did, then separately when she continues, saves what she did. separate IP addresses, changes would be tracked and assigned to the individual IP address.

If she gets audited, they can see what was done on your computer, compared to hers. Do yourself a favour, check your IP address (just google it on your computer) and then go and write a statutory declaration that says exactly what you assisted with on your computer. State that she stated you're wrong on the bonus needing to be declared and took over doing it herself at that point.

If it's not an online system like that, then do what others are suggesting.

But if it is, it's not nearly as complex to prove, because if they approach you about the information being incorrect, you can then show your IP address and stat Dec, they can check it and verify what you're saying, meaning you'd be all clear unless she fights it with her own stat Dec. If you think she may do this, then back it up with recordings.

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KimACady t1_jdulf7p wrote

These answers Crack me up. Here's the thing, you aren't going to sign her tax form as a paid preparer (unless you are a fucking idiot). There's nothing the IRS even cares to do to you. She is responsible for her taxes and the IRs will address the issue with her.

My advice is to let her do her own taxes. I expect they are simple enough. Should she somehow get you involved and the IRS contacts you just be completely honest. Heck, you can even refer them to this post.

One last thing with respect that her comment that her "work knows more than you do". That is most likely true AND THAT IS WHY THEY INCLUDED THE BONUS AS TAXABLE INCOME ON HER W2.

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YogurtclosetActual75 t1_jduqu9s wrote

Replying to KimACady (#2,387,285)

Exactly. All you need to do is nothing. You didn't submit a false return. You've done nothing wrong. Let her do whatever she pleases. The bummer is that she'll likely get away with it. The IRS is unlikely to audit her.

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KimACady t1_jduyjii wrote

Replying to YogurtclosetActual75 (#2,387,903)

I was wondering about that. I can't see the IRS auditing her, either. However if she were to take that 3500 bonus off her income wouldn't the IRS immediately flag the discrepancy between her W2 and what she reported as income. I mean, that has to be automated by now!

One time several years (when I still did my taxes completely by hand) ago I mistakenly flipped two digits when I adding my wife's and my W2 taxable income. Within about 1 month I got a notification from the IRS notifying me of the discrepancy along with a check for the additional refund that resulted from my error. I'm confident that the IRS would handle her return similarly.

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hmbritt t1_jdvciun wrote

Her bonus should be included on her W-2. Either listed separately on the W-2 as a bonus, or part of her income total.

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RRoyale57 t1_jdvh059 wrote

I would’ve just tore up the papers in front of her face and told her to do it herself but now she has to go hunt for the paperwork again

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gunfart t1_jdwsbmx wrote

Replying to KimACady (#2,387,285)

that's what i was trying to figure out. dude is scared that the irs is going to crack down on him for his ex filling out her tax prep form wrong. like, what? is your name on this thing anywhere? nope! unless you're a moron and stated that you filled it out for her. which you shouldn't have..

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your response to the irs: "no, i didn't fill out her tax prep forms"

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f12saveas t1_je2ttfy wrote

I wouldn't worry about it at all. The IRS is only interested in collecting tax and won't really care about anything else. Plus they audit very few 'lowish income' individuals, especially those who are still recognized as students.

I know people making 40-60k whom are somehow able to get EBT benefits and completely filling out taxes wrong. The online systems instantly approves their federal and state refunds.

By the way, why are you paying anything for filing taxes? https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free or cashapp/taxes

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