What should an EA do when a client finds a K-1 after filing?

Question

AcadiFi · Accepted Answer

The practitioner should determine whether the missing document changes the return and, if so, prepare an amended return. A late K-1, corrected Form 1099, or overlooked income document can affect income, deductions, credits, basis, and state filings. Ignoring it invites matching notices or later corrections.

Suppose Riverstone Tax filed a return in March. In May, the client finds a partnership Schedule K-1 showing $6,200 of ordinary business income and $900 of separately stated charitable contributions. The EA should review the original return, enter the K-1, determine federal and state changes, and explain any additional tax, penalties, or interest. If the tax increases, paying promptly can reduce interest.

EA candidates should remember that amended returns are not punishment. They are a correction mechanism. The practitioner should also update client procedures: document request lists, portal reminders, and questions about partnerships, S corporations, trusts, and brokerage accounts.

The best answer is not "wait to see if the IRS notices." It is review the missing information, amend if material, and document the client's late submission and the practitioner's advice. For exam purposes, identify the taxpayer type, governing rule, required documentation, timing issue, penalty exposure, and next procedural step before choosing an answer. Practice more in our EA question bank.

What should an EA do when a client finds a K-1 after filing?

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