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

Who is Surgent?

2008/10/29 Kate M Coyne <KateMc@nc.rr.com>

From the Surgent Tax Camp yesterday:

For entertainment hey need to have a written record of time, date, place, and what was discussed, plus the receipt if the meal is over $75, just the credit card receipt is not sufficient.  If they sign off on that you are fine, you don't have to see the receipts and log.

 

For auto, in order to claim depreciation you have to have the beginning and ending mileage, in writing.  They must have a written log if claiming miles.

 

Cell phone, they have to have a log and go through the log for personal calls and give you % of use. 

 

Estimates do not fly.

 

If they do not have this info the deduction is not allowed.  If the client is audited they will sell you down the river saying you never told them, so get it in writing that they have this information! 

 

Surgent's engagement letter has a check list of all the CYA stuff to ask the client, but only for the individual client.  They are working on a check list for business.  I think I will work on one for my own use this year and have the clients sign off.

 

Also Jack Surgent said he files an 8275 with a tax return when he knows a client is guessing at the basis they have in a stock sale.  It covers him and he doesn't think it hurts the client.

 

 

Kate

 

----- Original Message -----

From: Cris Kelly

To: taxchat@yahoogroups.com

Sent: Wednesday, October 29, 2008 1:04 PM

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

 

 

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