Prior preparer not cooperating

[Jiggers]

Just to be sure I understand

A client wants a copy of his 2006 and 2007 return sent to the bank, I can't do. Because of the new disclosure rules of having the disclosure authorization before the return was done.

It doesn't make sense.

A client brings his 2008 tax information in and I ask if he thinks he will be sending this to some bank or mortgage company in the future and if so, I will need his written authorization now, telling me when and where in the future................... He will think I have been doing taxes too long and have flipped out....................

[Bees Knees]

A client wants a copy of his 2006 and 2007 return sent to the bank, I can't do. Because of the new disclosure rules of having the disclosure authorization before the return was done.

Wrong.

You can in fact get your client to sign a disclosure authorization after the return is signed.

The idea that you can't is a miss-interpretation of the regs based on a poorly written IRS website.

Regulation Section 301.7216-3 says:

(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 means if you want to solicit unrelated business from your client based on return information, you need that signed disclosure before the client signs the return. If it is not in the context of a solicitation purpose by you, the reg merely says you need the taxpayer's written consent before the disclosure. That means you can get the written consent anytime, including after the return is signed, if it is your client requesting you do something with their return information.

[Jiggers]

Thanks, Bees Knees

Does that mean I can use any wording on the authorization and not the required wording that the IRS requires?

Their wording really doesn't make sense if releasing this to a bank or mortgage company like I referenced.

[Skate1968]

Prior Preparer not cooperating

Back to my issue with this prior preparer.

I took the advice of someone on this forum. I stopped and tried to move beyond this idea of 'strongarming' the prior accountant.

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.

(As i've said before i do appreciate this advice. My client is paying me to fix problems. He didn't bring me on to listen to me complain.)

I sought out to obtain the info i needed without the prior preparer's cooperation.

I called the IRS for the payroll tax information -- the quarterlies. Only the third quarter 2008 941 was filed. The first and second quarter 941 were not filed. (The IRS employee, by the way, was cooperative in providing what they had for the third quarter and giving me some kind of instant POA status.)

But now it will be a challenge for me to to recreate the entire year's payroll records without the quarterly payroll tax returns. It will be a challenge for me to tie out year end payroll and get w2s mailed within in the next seven days. (completing 1st and 2nd quarter 941s will be much less of an issue) It will be challenging simply because this is not the only comittment that i have at this moment. I don't have spare time.

(and in hindsight, it's obvious that i should have addressed this issue much sooner than later. My client thought his accountant would eventually provide the documents for us and save me the time and trouble.)

Another associate of mine suggested that i inform the prior accountant that we'll be seeking legal counsel on this isssue. The prior accountant was hired to do payroll tax returns and therefore the returns are the property of my client. It is not lawful for this accountant to withold these documents from my client. An associate suggested that such a letter on the letterhead of a law firm would likely shake up the accountant enough to get his *** moving.

I don't know that the threat of legal actoin would necessarily help at this point. But i don't think it would hurt either and i'll certainly be willing to do it -- a last ditch attempt. (However getting such a letter on legal letterhead might take much more time and money than it's worth. Some other accountant who did not have an active CPA license might consider creating a fake letter from a fictious law firm. I wonder if there's a way to get such a lawyer letter emailed to this accountant for cheap?)

I already have, with the client present, contacted the irs for 941s, the state for witholding and the state for unemployment comp. I asked them to provide any and all information available thru any and all means available.

I understand that at this point i'm really just going to have to bite the bullet and get to work. After reading Taxmandan's advice i'm making it a point to assure my client that i will soon get all this mess fixed.

Do any of you have any thoughts on this? Can you think of something that would help me over the next 8 days? (i've already considered the fact that my client won't mind if he recieves his w2 a little late. Whereas the single mom waanting on her EIC is already asking for it.)

thanks for reading

[BHoffman]

I guess the only real thought I'm having that might help is if it's true that misery loves company

I'm also swamped and cranking out work like crazy, with the same problems about prior period paperwork. Prior accountant did not provide copies, only originals, and client mailed them out without copying. Client does not want to ask prior accountant for copies. I'm stuck with a POA and waiting for IRS transcripts. Sigh.

So, you aren't alone.

[Skate1968]

BHoffman,

thanks for posting.

The IRS employee which i spoke to was willing to give 941 figures verbally over the phone. I'm not sure if you want to go that route.

[Lion]

Send client

I'd suggest to client that they complete the payroll year with prior accountant who has paperwork. Use him through 4Q and W-2s. Use you for 2009 and tax returns and going forward.

[Skate1968]

Lion,

Thanks for responding (although i'm not sure if you were responding to me of BHoffman).

I would gladly let this guy other accountant complete the payroll if he would do it. But the fact is that there are quarterly payrolls that are listed as unfiled -- unfiled quarters with the IRS, unfiled with the state.

In my case asking the old accountant to take it would be like throwing my client to the wolves.

[BHoffman]

Lion - tried that. Didn't work. Client's lower lip started quivering.

[Lion]

No crying allowed

I hate it when clients cry in my office! If very few employees, are final check stubs available, from your client or his employees? Other than the EIC mom, can you convince clients that W-2s might be a bit late with change in preparer? Good luck.

[Skate1968]

I hate it when clients cry in my office! If very few employees, are final check stubs available, from your client or his employees? Other than the EIC mom, can you convince clients that W-2s might be a bit late with change in preparer? Good luck.

Again, thanks for responding, Lion.

It's funny that you mention w2s being late. That is precisely the converstion that i just had with my client. That's what we discussed -- W-2s being a little late.

The EIC Mom seems pretty nice. Perhaps my client could give her a buck or two in lieu of her being understanding of our situation.

[DaveO]

It's just starting here.

We had a client for whom we did the quarterly reports only. He did his own payroll calculations, employees in 2 states. When we were so rude as to demand he pay us for the first 6 months of work before we started on the second six months he took his business elsewhere. I believe he just did the payroll without filing the 941's. He has since closed his doors and disconnected his phone. The phone calls looking for W-2's have just started. We are offering the first 6 months but the employees are on their own after that.

[Skate1968]

bump,

The state of Pennsylvania was pretty cooperative. They faxed us a record of witholding tax which was due and paid.

The prior #$%&head filed two of the three quarters which were due. This task is beginning to appear less daunting .