Ask The Expert #5

Q.  I discovered a missed deduction in a previous year’s return.  Will I be likely to be audited if I amend my return?

A.  I have amended returns every year for people who have missed deductions, for over 25 years.  I have never prepared an amended return that has been audited.  However, if you file an amended return that looks odd, you could get audited.  If you have documentation to back up anything odd, I would claim it.  If they question it, all you have to do is provide the documentation.  Unusual situations can happen.


Q.  I have been separated from my husband for several years, and he won’t agree to a divorce.  How long do I have to file Married Filing Separately?

A.  If you didn’t live with your spouse for the last 6 months of the year, you have the option of filing Single or Head of Household if you have dependents living with you.  This can make a huge difference since your credits are very limited when you file Married Filing Separately.  Several years ago, a new client had been referred to me.  Another tax professional had prepared her previous return and current return.  The previous preparer had used the Married Filing Separately filing status, and she owed about $500 for each year.  I filed her returns using the Head of Household status since she could claim more credits.  Instead of owing $1,000 for the two years, I got her a refund of over $11,000.  It is extremely important to file your return to your advantage.


Q.  I own a business and am trying to buy a house.  My bank says that my profit is not enough to buy the house I want.  Can I file a return without all of my expenses and then amend it after the mortgage has been approved?

A.  That could have grave consequences.  First of all the IRS could rule it as a frivolous tax return.  The penalty for filing a frivolous tax return is $5,000.  A frivolous return is one that does not have enough information to figure the correct tax.  You also are committing mortgage fraud.  Mortgage fraud can result in huge penalties and prison time.  There are strategies that allow you to show a small profit and pay minimal taxes and yet have a debt ratio as if your income was higher.  Search for a tax pro who has knowledge of the necessary strategies for mortgages. 

Submit your questions to Ask the Expert at