Orig Docs vs Copies and Workpapers

[S T]

What is the rule on returning paperwork to a client that is non payment.

I know we have to return all of their "original paperwork" like W-2, 1099 forms etc. I stress "original".

Do we have to return photocopies of paperwork such as bank statements, receipts, or fax copies received of similar documents?

Of course we do not have to return any of our workpapers, notations or other information, correct? I can erase all of my pencil notes on the clients original documents.

Guidance would be appreciated before I tear up something in 2 pieces or more.

Sandy

[DTS]

Documents

Sandy,

For me, I would return everything that I rec'd, but not until I made copies of everything I was given, just in case client was to say "he had this or that". And most important, not until I was paid in full!!! I would like to see what others say is proper, also.

My natural response is to tell them to go you know what!

Mr. Hothead

[JON]

Why keep anything

Collection can always be a problem, but retaining client's orginal information I think is a big no no. I went to a pre 230 course a couple of years ago where the lawyer presenting it said NEVER keep originals and make sure the client and you botrh know your retintion policy and do not keep a thing longer than you state.

Professionals (us) lose out on everything so do not give yourself any additional exposure.

HR NOW in the top five accounting and tax has never kept information for 1040s. We do scan, but with their copy of the 1040 is our letter stating all information they gave us is attached....

[Chief]

Keeping Documents

I know this post refers to nonpaying clients but would it also not pertain to paying clients as well? It seems that one wishes to remove all references to a client who has not paid an honest debt owed to the preparer. If this happens often I think I would use a collection agency and at least have a history of that client's nonpayment on his/her credit history.

One other thing that comes to mine is the requirement that the preparer retain copies of 1099's and W2's where tax has been with held for returns that are efiled. I have always taken the original copies for this purpose. Are you guys saying these should be returned to the client?

[Gretel]

e-file/W-2's

I always looked at the original W-2's as me being the keeper for the IRS and client's copy are those (his originals), which say "employee copy".

After all if we are ever audited for e-file we need to produce the originals, right?

[Chief]

Orig copies vs Employee copies

Gabriele, Your position is the one that I have taken for efiling. In fact, I believe it is the position specified by IRS for us to follow. Thanks for sharing your position.

[JG EA]

Papers

I have many years worth of returns and papers for one client (background material to do some representation) who never paid me for the work I did and never came back. I was going to send them to her just to get them out of the office, but upon calling the number and looking her up in information, she's wasn't to be found. I did write her early on, but no replies.

Well, I don't want to distroy them, so I guess I just have to hold on to them.

Actually when I look back there were just a few clients each year who didn't pay. Not so many now, because I don't take that many new people each year now. But when you add them all up, well it's shocking.