Re: [taxchat] income

I have read all the threads to this post and think the way I might handle it is this:

 

1.  Make a list of all errors, etc.

2.  advise client of these errors in writing

3.   Advise client of options including.

        a.  Demand prior accountant to fix prior year and amend

        b.  Current year which you a doing has little effect from prior discrepancies other than opening retained earnings.

        c.  "we" should advise remedies but stay out of the argument with prior preparer.

        d.   Advise client that they may have to speak to an attorney - hopefully there is an errors  and omissions policy to                   help make your client whole.

 

Arnie

  

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

From: Debbie Wilson

To: taxchat@yahoogroups.com

Sent: 12/04/2008 10:43 AM

Subject: RE: [taxchat] income

I have no problem with this client nor has he ever said he didn't want to pay taxes.  He has worked with me and never questioned my advise.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Donna L. Loeffler, CPA
Sent: Thursday, December 04, 2008 9:30 AM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] income

Debbie,

I would report this CPA to your board of accountancy.  That is a pretty major error and the reason given is not good enough to excuse it, in my opinion.  For a CPA not to give you access to their workpapers is not just a breach of courtesy, it is also a breach of ethics.

It also sounds like the client likes to give the accountant a target number to shoot for which reeks of fraud.  I don't think I'd like to stick with the client, either. 

If you do stick with the client and you have gotten the client's income down below zero, you may be able to carryback 2008 net loss to 2007 and offset some of that gain you are going to have to report on the amended 2007 return.

Donna

Donna L. Loeffler, CPA

936 Church Avenue

St. Charles, MN 55972

(507) 251-8119

dllcpa@hbci.com

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Debbie Wilson wrote:

I picked up a new account a couple months ago and haven't been able to reconcile the beginning bank account balance with what was on the ending balance sheet for last year.  Finally got hold of the CPA firm that did the return and asked for a general ledger for the last month of the year, to see if I could find anything.  They gave me  many excuses why they couldn't come up with that but I finally insisted that the client had a right to know where their fiigures came from.  I had already found several other mistakes on the balance sheet including a bank account he had that was not accounted for.  One of the CPA's finally called me back and told me that the girl who worked on the account was no longer there and after doing some review they discovered that over $28000.00 worth of bank deposits, which were income, had not been accounted for on last years financial statement because the client didn't want to pay taxes.  She then proceeded to tell me we would have to pick it up as income this year.  I had worked very hard to get his profit down before the end of his year so that he wouldn't owe much if anything in taxes.  Now I'm stuck with this.  At this point I know last years return was wrong so I am going to amend.  On top of that, he borrowed almost 60,000.00 to pay expenses last year and the loan on the books has a balance of $8000.00.   To top it all off, they put me on hold at one point but then must have accidently hit the phone button because I could hear  everything they were saying.  They weren't speaking very nicely about me so I finally interrupted their conversation and told them that I could hear everything they were saying.  I've been fuming ever since.  When a client leaves us I always work with the new accountant and give them whatever they need.  I feel the client is entitled to copies of bank recs and a general ledger if they ask for it.  This client will have no back up for the work they did if ever audited.  Any suggestions as to where I should go from here?  They are still giving me nothing.

Sincerely,

Debbie Wilson EA

Preferred Accounting

420 E Beloit St.

Darien, WI  53114

262-724-3635 Tel

262-724-5645 Fax

IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department regulations, we hereby inform you that to the extent that this message contains any U.S. federal tax advice (including any attachments unless otherwise expressly stated therein), said advice is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code. Unless you have our express prior written consent, no portion of this electronic correspondence (including any attachments hereto) may be used in connection with the promotion, marketing or recommendation to another party of any transaction or matter addressed herein as relates or may relate in any way to any U.S.

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Arnie Socol
President
Ways & Means, Inc.
845-562-6070

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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.

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