Re: [taxchat] Opinoin needed -- Keep or get rid of client.

I would ask him to certify that the expenses are 100% business, and ask to see a few receipts.  Explain to him that you need to make sure they are keeping the required records.  I don't think it's necessary to see every single receipt.  A CPA doing an independent audit of a company's books just asks questions and spot-checks certain documents.  They don't ask to see every single receipt, and I don't think that's necessary or feasible.

 

The amount of meals may or may not be out of line, depending on the type of business it is, the number of employees, whether they travel a lot or entertain customers, etc.  They could easily rack up $10,000 in meals if two employees each spent $100 a week while traveling or entertaining customers.  So it doesn't sound that high on its face. (I know that was just one example of the items you were questioning)  For each expense, I would think about whether it seems like a reasonable amount considering the number of employees and type of work they are doing.  I would also ask about their reimbursement policy, whether they have an accountable plan, if allowances are given to employees, and if they are required to return any excess, etc.  Also, whether they use meal per diems, and what method of calculating per diem.  This is all for their own benefit, to protect them from potential exposure in case of audit.  Let them know that you are there to help them and give them guidance, and that you are on their side.

 

I don't know why you would want to get rid of the client.  You didn't really say why you dislike him, so it's hard to say what you should do.  Is it because he's annoying, or he's rude, or you don't trust him, or what?  In the situation where someone is just a PITA, raise the fee enough to 1) drive them away, or 2) make you feel that you are making enough money to compensate for the PITA factor.

 

 

From: Cris Kelly

Sent: Wednesday, October 29, 2008 12:04 PM

To: taxchat@yahoogroups.com

Subject: [taxchat] Opinoin needed -- Keep or get rid of client.

I have a client, the more I work with the more  I dislike.

The problem is that I am in the middle of many things and he is paying me a lot of money.

I am trying to get his 2006 return out, this is a large corp with a tons of transactions.  The only way I would do the return is if I did a complete audit of the books and verified, that at least in my opinion, it would past an IRS audit.

There are a couple of items that I am questioning – auto expenses, meals, tele, etc.  Client is stating that all the costs are legitimate for the business and is writing a letter to me stating the fact. 

Am I going to be okay if I do his return and based on his statement that he has reviewed his records and all the expenses reported are legitimate?  Or, will I be subject to penalties if I don't ask to see proof.  For example, the company – a C corp – has @ $10,000 in meals, do I need to see everyone one of the receipts to verify that he has written down the required info?

Any input would be appreciated. 

If your suggestion is to get rid of the client, I would appreciate suggestions on how to do it.

Thanks,

Cris

No virus found in this outgoing message.
Checked by AVG.
Version: 7.5.549 / Virus Database: 270.8.4/1753 - Release Date: 10/28/2008 9:20 PM

__._,_.___

IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.

Your email settings: Individual Email|Traditional
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch to Fully Featured
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

__,_._,___