Partners Feuding...

[equinecpa]

I have a client who has requested I prepare 2 partnership returns for her and to deliver the data to her, and not the other partner involved. I have complied as she is the tax partner. The reason she has made this request is that the other partner doesn't want to pay for the work to be done. Of course the other partner has requested the documents be delivered to her now.

I have a couple of questions:

1) Do I have any obligation to deliver to the 2nd partner any of these documents? I don't believe I do.

2) Is my client as the "tax partner" required to deliver to the other partners the documents if she has not been reimbursed for them?

And happily both partnerships have been terminated, these are final returns.

Thanks for your thoughts and Happy April Fools day...looks like I"m dealing with one now!

Carolyn

[BHoffman]

I have a client who has requested I prepare 2 partnership returns for her and to deliver the data to her, and not the other partner involved. I have complied as she is the tax partner. The reason she has made this request is that the other partner doesn't want to pay for the work to be done. Of course the other partner has requested the documents be delivered to her now.

I have a couple of questions:

1) Do I have any obligation to deliver to the 2nd partner any of these documents? I don't believe I do - I have delivered them to the person who hired me.

2) Is my client as the "tax partner" required to deliver to the other partners the documents if she has not been reimbursed for them?

And happily both partnerships have been terminated, these are final returns.

Thanks for your thoughts and Happy April Fools day...looks like I"m dealing with one now!

Carolyn

Hi Carolyn - The partnership itself is your client. The tax matters partner is your contact. The TMP is required to give K1s to the other partners. She will be subject to penalty if she fails to provide the K1 to her partner, see IRC 6722(a):

http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._6722._Failure_to_furnish_correct_payee_statements

[Burke]

If the other partner is a general partner, I would give him/her anything they requested. Your fees should have been paid by the partnership, so you are covered. It's sort of like a MFJ return. Both are entitled to a copy, if necessary.

[RitaB]

Just had a call from a disgruntled partner

She's not unhappy with me, but her preparer has written a letter to the other partner, (who is TMP and my client) requesting a complete copy of the return. The partners are feuding, my client has not complied with her accountant's request, and she faxed me a copy of the letter hoping I will take care of it and she can avoid further contact with her partner.

My client (the other partner) is an attorney who knows everything, and I can see why she wishes to avoid contact. I am thinking of firing him myself. Always challenging me, "Why do you need to know that?" etc.

If I give a copy of the return to her, and my client doesn't like it, am I in hot water? I don't care it HE fires ME. I just don't want something worse to happen. After all, he can get cheap legal help, and I can't.

Do others agree with Burke on this?

[dsi]

I would make very certain that you have an engagement letter in your files that addresses this concern. At the very least, it will give you some guidance with regards to how you handle some of these types of problems.

[RitaB]

Hypothetically speaking

I would make very certain that you have an engagement letter in your files that addresses this concern. At the very least, it will give you some guidance with regards to how you handle some of these types of problems.

If you were in this situation, and this concern was not addressed in your engagement letter in the file, and your time machine was in the shop (so you could not correct the letter retroactively), would you give a copy of the tax return to the partner who was not your contact person when you prepared the return? Even if the contact person was an attorney?

[dsi]

I believe at this point I would contact my E&O carrier and ask for advice.

[BHoffman]

Hi RCooper - sounds like you want to just mail a copy to the other partner and be done with it. Can you just call your client and offer to mail the copy to his partner if he signs a short statement giving you permission?

"To RCooper:

Please mail a complete copy of the 2008 form 1065 for Company Z to partner A.

Signed:______________________dated________________ __"

I guess I'd try that first.

[veritas]

partners

My dad told me once "partners are people who are afraid to run a business by themselves".

[Edsel]

Available from IRS

If the TMP files the return as you have prepared it, there would be a tax return on record at the IRS, which I'm presuming could be subpoened (for their normal fee) by anyone showing they are a general partner.

The IRS could furnish a copy (for their normal fee) to the TMP without a subpoena, I would think.

Does anyone know how this would work???

The idea here is to get the other partner, an attorney, to bang on someone else's door instead of the tax preparer...

[erchess]

Identity of Client

I thought I had been told on this board that in the case of a Partnership or Corp the tax professional only has one client and that is the person who arranges for our services unless and until that person leaves the scene or assigns the role to another person.

I thought that while we can't go along with anything crooked and we don't have to do anything that makes us uncomfortable we also can't do anything our client does not want us to do.

In an MFJ return are both members of the couple our clients even if only one works with us?

[taxxcpa]

Joint return

If they file jointly, both sign the return and both would be, in my opinion, clients and you could give a copy to either or both.