Negative tax engagement letter

[ChEAr$]

Maybe he was in a crummy mood, your letter was handy, and he wanted to hold forth his professional opinion to lord it over a lesser mortal and thus inflate his ego. Or maybe he's just a horse's ***. Who can say? I've got 30 year old insults still smoldering in my "get-even someday" compartment.

Or consider the time of day he called; was it during an extended happy hour? IOW,
maybe he was drunk.

[ChEAr$]

For those of you not knowledgeable about Tennessee history, the first "State" in this area was the State of Franklin, circa 1780-1790s although it was never granted statehood by the U S Congress. They had their own government and own constitution, disputing their sovreignty with North Carolina. I only mention this to call your attention to the following:

It was unconstitutional for attorneys to serve in the State Legislature.

In a similar vein, when Georgia was founded in 1733 by General Oglethorpe,
all lawyers were banned from the colony.

Also quote most times out of context, it was Shakespeare who wrote "first thing we do is
hang all the lawyers."

[Snaggletooth]

To All

...who have asked about the latest sporadic eruption of sudden and perhaps misguided vocabulary:

I can't think of a good dictionary definition for "scienter." Laws (much more common law than statutory law) often change the guilt or blame if the offender is aware of certain facts, as opposed to not being aware. For example, passing a counterfeit $100 bill is treated with much more venom if the passer knows it is counterfeit, as opposed to having received and passed it with no knowledge that the bill is defective.

In many cases of law, knowledge of facts places more responsibility on a party than would be the case if he remained ignorant of the same facts. This knowledge is called scienter in matters of law.

Pauline brings a 1099-S to you where she sold land for $100,000. She says she bought it three years ago for $90,000, so you report LTCG accordingly. Unbeknown to her, however, you know for a fact that only nine months ago your first cousin owned the land, in fact you signed off as a witness on his contract with a real estate agent. Thus, Pauline could not have held the property more than a year and is not entitled to long-term treatment.

This special knowledge you have is "scienter" and because you have it, you cannot prepare Pauline's transaction as long-term. If you report as long-term, you are doing so with scienter. In plain English you simply "know better." Reporting long-term with this scienter is a more accountable offense for a tax preparer than simply reporting the error without scienter. Scienter almost always adds another burden of responsibility for those who have it, not just for tax preparers and other professions, but also to civilians at large.

[Davc]

From another board:

"Ninety-nine percent of the body of practicing attorneys makes the one percent that is devastatingly malignant look like saints."

[RZellers]

I would just echo what some others have said. Signed or unsigned, in the end, it's still just a fancy piece of bathroom tissue. In the end, if it ever comes down to it, a judge will decide who was right & who was wrong. My lawyer once said "signing a document where you made an agreement to circumvent the law is pretty much worthless at best, incriminating at worst".

Thankfully, our practice has matured to the point where if someone doesn't want to do business on my terms, I am more than happy to direct them to one of the franchises where they can pay twice as much.

It feels good too

[BHoffman]

RZellers - It is nice, indeed. Any one client can go down the road if they don't like the way I prepare their tax returns. Correct and complete is the order of the day. I work hard to find legal deductions and qualification for tax credits. I also work hard to make sure they understand their reporting and substantiation requirements, which is spelled out in the engagement letter. Still puzzled as to how anyone could take offense of its content.

Perhaps the attorney dude thinks the authorities can hold me liable for his tax (as well as penalties and maybe interest).

Shrugging it off. He can take his crabbiness and bring joy to someone else if he wants. There are a lot of clients out there.