Prior preparer not cooperating

[Skate1968]

I picked up this S Corporation which i was looking at. (which was easy as the prior accountant is an #@%hole.)

http://www.thetaxbook.com/forums/showthread.php?t=9967

The prior accounant is not providing the client with copies of the quarterly payroll returns which were requested. I need payroll tax returns from 2006 thru the present.

Has anyone ever had this problem? The client has already requested the info via email (so i'd say that he requested it in writing).

I'm going to write him a request also -- sending it by both mail and email -- requesting that he furnish his client with copies (not me).

I am angry at this #@&%.

What would be the next step if i wanted to play hardball with him? I imagine that this prior accountant is breaking some kind of law.


(by the way i've already received a downpayment from the client and i am not at all worried about him going back to the prior accountant.)

thanks for reading

[Jiggers]

Wait a minute..........

I picked up this S Corporation which i was looking at. (which was easy as the prior accountant is an #@%hole.)

http://www.thetaxbook.com/forums/showthread.php?t=9967

The prior accounant is not providing the client with copies of the quarterly payroll returns which were requested. I need payroll tax returns from 2006 thru the present.

Has anyone ever had this problem? The client has already requested the info via email (so i'd say that he requested it in writing).

I'm going to write him a request also -- sending it by both mail and email -- requesting that he furnish his client with copies (not me).

I am angry at this #@&%.

What would be the next step if i wanted to play hardball with him? I imagine that this prior accountant is breaking some kind of law.


(by the way i've already received a downpayment from the client and i am not at all worried about him going back to the prior accountant.)

thanks for reading

Maybe the return preparer gave copies of those payroll reports when they were done and the client, if they are like mike, can't find them.

Maybe the return preparer was never paid for the work.

Now, if the return preparer never gave him copies and won't respond now, and has been paid for all the work, there is not much you can do.

I picked up a corporate client and the previous return preparer, not licensed, didn't keep any tax records. I had no way of knowing how the depreciation was calculated and what assets were in the corporation.

[Skate1968]

Thanks for responding, Jiggers.

Maybe the return preparer gave copies of those payroll reports when they were done and the client, if they are like mike, can't find them.

Maybe the return preparer was never paid for the work.

No, this client and i have known each other for a while before talking business. And this other preparer's work is crap. I'm not saying that the above scenarios are impossible. But i'd be extrememly surprised.

(actually my client did not pay for all of the returns. he states that he never got a bill. And that assertion is completely consistent with everything else that i've seen.)

I picked up a corporate client and the previous return preparer, not licensed, didn't keep any tax records. I had no way of knowing how the depreciation was calculated and what assets were in the corporation.

I've had that problem. I had to look at prior year's 4562 and recreate. Although it sounds as if you didn't even get the 4562s.

[taxmandan]

Take a deep breath, then another one and move beyond 'playing hardball' with the previous preparer. The best service you can give your client is to get the records form theIRS and take care of the situation for him. Whether there is justification for the lack of coorperation or not, it is unlikely there is much you can do to force the preparer to provide the information.

[Skate1968]

Thanks to both Jiggers and Dan -- both very helpful.

I'm actually a little surprised at the answer. I thought there would be something that we could do.

But if we're not in a postion to strongarm him it's very good that we know that.

Dan,
I've never had to 'recreate' payroll records. But i'm now thinking that it might not be quite as time consuming as i had anticipated.

[PIGLEE]

According to the new rules for "Use and Disclosure", that starts 1-1-09. Unless a client signs a disclosure letter stating that I can give information to "So-Named-Preparer", prior to him signing the 09 tax return. In 09 or in the future the only person I can give this information to is the client. I think this is going to be one major headache, for everyone. No more copy to mortgage company, even with written approval, unless the approval was given prior to signing the tax return.

[Redneck]

Can you

prior to him signing the 09 tax return. In 09 or in the future the only person I can give this information to is the client. I think this is going to be one major headache, for everyone. No more copy to mortgage company, even with written approval, unless the approval was given prior to signing the tax return.

cite a REG for me.

[erchess]

My Two Cents

If the preparer in question is un-enrolled, then I have no idea what ethics requirements apply to him or her in this matter.

If the preparer in question is governed by Circular 230 then he or she must on request "promptly return any and all records of the client that are necessary for the client to comply with his or her Federal tax obligations.....The existence of a dispute over fees generally does not relive the practitioner of his or her responsibility under this section." However it goes on to say that if State law permits a practitioner may keep anything that does not have to be sent in with the return but in this case must give the taxpayer access to the rest and the ability to make copies. Also a later paragraph clarifies that the records in question do not include work done by the tax professional for which the client has not made contractually owed payment. (Circular 230 Section 10.28)

However I tend to agree with those who suggest getting the payroll tax forms from the IRS rather than fighting with the old preparer because this will save time and aggravation. If the prior preparer has the only copy of something indispensible and not reconstructable that was given by the client then it should be possible eventually to pry it out of his or her hands but the cost in time and legal fees may not be small.

[S T]

Payroll Returns

Unfortunately I believe you have to request copies of the returns. I tried e-services on my own account, and can not actually retrieve the quarter filing, only the tax assessed and the payments. not the actual wages, etc.

You might also try your State reporting Agency and see if they can fax or email them to you, sometimes the State Agency is faster than the IRS.

Sandy

[PIGLEE]

Here is my reference, from the IRS Web site

http://www.irs.gov/efile/article/0,,id=188390,00.html

Also at the bottom check out the questions and answers. Look Q8 and A8.
Also look at Q1 & A1. There is a 1,000 fine, and 1 year in prison for each violation.

I am surprised there is almost nothing about this on this Forum. On another forum I use, there is extreme amount of talk about this.

[veritas]

Do you mean

[QUOTE=Piglee;70704 prior to signing the tax return.[/QUOTE]


prior to signing the release?

[BP.]

According to the new rules for "Use and Disclosure", that starts 1-1-09. Unless a client signs a disclosure letter stating that I can give information to "So-Named-Preparer", prior to him signing the 09 tax return.

No more copy to mortgage company, even with written approval, unless the approval was given prior to signing the tax return.

I don't have this straight yet.

Seems the rules distinguish between "Use" & "Disclosure" of tax return information.

Seems "Use" requires client authorization before they sign the return.

For "Disclosure" (those more run-of-the-mill requests we commonly receive to send a return copy to the bank, financial aid office, mortgage co, etc) --- can't that be done with proper written authorization by the taxpayer after they've signed the return?

These authorizations seem to require the inclusion of lengthy & specific language, so I'd like to have some handy, but not sure when to use them- pre or post tax return signing?

[Bees Knees]

Here is my reference, from the IRS Web site

http://www.irs.gov/efile/article/0,,id=188390,00.html

Also at the bottom check out the questions and answers. Look Q8 and A8.
Also look at Q1 & A1. There is a 1,000 fine, and 1 year in prison for each violation.

I am surprised there is almost nothing about this on this Forum. On another forum I use, there is extreme amount of talk about this.

That information is misleading and totally out of context. The actual regulation says no such thing.

Under frequently asked questions on the IRS website, Q8, it says the rules for obtaining consents are found in Treasury Regulation Section 301.7216-3. You can read that regulation for yourself at:

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=6554cebf72cc2a24b57fbaacdde457c3&rgn=div8&view=text&node=26:18.0.1.1.2.16.66.7&idno=26

What the regulation actually says is as follows:

(b) Timing requirements and limitations —(1) No retroactive consent. A taxpayer must provide written consent before a tax return preparer discloses or uses the taxpayer's tax return information.
(2) Time limitations on requesting consent in solicitation context. A tax return preparer may not request a taxpayer's consent to disclose or use tax return information for purposes of solicitation of business unrelated to tax return preparation after the tax return preparer provides a completed tax return to the taxpayer for signature.

That is quite different than what the IRS website implies. The IRS website implies that any and all disclosures we make can only be done if we obtain a signed consent prior to the client signing the tax return.

For example, the summer following preparing the return (where we never had the taxpayer sign a consent), our client calls and says to send a copy of his return to his mortgage company because he is trying to refinance his house. According to IRS website, we would have to say, sorry I can’t do that. You never signed a consent prior to signing your tax return.

But that is not what the reg says. The reg says you can’t disclose information without the taxpayers consent. We can still get consent after the client signed the return in cases where the client is the one calling us asking us to send a copy of his return someplace.

What we can’t do, according to the regulation, is call the client after the return is signed and ask for consent to use the tax return information for our own solicitation or other unrelated business purposes.

If we want to use the information for our own use, the written consent must be signed prior to the taxpayer signing the return. If the client wants us to disclose the information to a third party, the client can sign that kind of consent anytime, even after the return has been signed.

[Jiggers]

Thanks, Bees Knees

(snipped)

But that is not what the reg says. The reg says you can’t disclose information without the taxpayers consent. We can still get consent after the client signed the return in cases where the client is the one calling us asking us to send a copy of his return someplace.

What we can’t do, according to the regulation, is call the client after the return is signed and ask for consent to use the tax return information for our own solicitation or other unrelated business purposes.

If we want to use the information for our own use, the written consent must be signed prior to the taxpayer signing the return. If the client wants us to disclose the information to a third party, the client can sign that kind of consent anytime, even after the return has been signed.

I do not offer any other products. I do not need a disclosure form signed to recommend that the taxpayer fund his IRA or retirement plan to save some taxes.

Clients call and want me to send a copy of their return to a bank or mortgage company or somewhere else, I need written authorization to do that. I will charge a fee for doing that. If the client wants to come in and pick up a copy of a return, one that he already has(!), I will give him a copy and he can send it where ever he wants to. I do not need any written authorization to do that.

The authorization form that I will use to do that does not have to have specific wording as the disclosure regulations require, correct?

The question I have is suppose my client calls and says "I am sending my son/daughter or employee/other relative to pick up a copy of my return and bring to me", do I need something in writing to do that?

[Skate1968]

Jiggers, that's an excellent question. I'm curious of that as well.