New client in jail!!

[oceanlovin'ea]

Had new client last week...referred by 2 very nice respectable clients that I have had for years and years.
Today one of them calls me and says "Have you seen today's paper? Ms. Smith was arrested for being part of a retail theft gang!"

I was waiting for her to give me some figures on her house cleaning jobs and expenses.

Don't think I want to sign that return! I'm sure IRS might check to see if she has some unreported income.

Linda, EA

[jimmcg]

Had new client last week...referred by 2 very nice respectable clients that I have had for years and years.
Today one of them calls me and says "Have you seen today's paper? Ms. Smith was arrested for being part of a retail theft gang!"

I was waiting for her to give me some figures on her house cleaning jobs and expenses.

Don't think I want to sign that return! I'm sure IRS might check to see if she has some unreported income.

Linda, EA

That's my kind of "house cleaning." Make sure you receive a court order before releasing (to anyone other than your client) any limited client records you may have.

[Nashville]

Too Much Credit

I think we're giving the IRS too much credit to assume they are going to put this situation under their microscope and collect taxes, fines, penalties, etc.

The IRS has no interest in pursuing tax collections from deadbeats, people already incarcerated, and those with destitute finances. They wouldn't pursue them even with a detailed road map or advanced GPS system.

What seems to be getting more of their attention are new sources such as tax preparers. Penalties they can collect and assess, even while the taxpayers themselves are getting a free pass. The "low-hanging fruit" theory.

[oceanlovin'ea]

They might say that I didn't ask enough questions and didn't do due diligence to find sources of income. Then it would be my money they would get. No thank you! I want to keep my money.

She drove over 300 miles about once a month to clean some houses in another city. Maybe she was transporting stolen property to the other city.

This is a crazy world!!!!

[taxxcpa]

Client in jail

Once I had a jailbird situation. I told them that since he was in jail he should get someone who was both a CPA and a lawyer.
That got rid of him.
I don't want jailbirds as a client since there is a chance of guilt by association.

[Fuzzy Faced Leader]

The only way to deal with jailbirds is to work through the client's attorney, as anything the client tells you could be used in a court of law. Also, get your fee up front.

[kpangelinan]

I think we're giving the IRS too much credit to assume they are going to put this situation under their microscope and collect taxes, fines, penalties, etc.

The IRS has no interest in pursuing tax collections from deadbeats, people already incarcerated, and those with destitute finances. They wouldn't pursue them even with a detailed road map or advanced GPS system.

What seems to be getting more of their attention are new sources such as tax preparers. Penalties they can collect and assess, even while the taxpayers themselves are getting a free pass. The "low-hanging fruit" theory.

Yeah, I agree here.

[Peachie]

LOL! Linda.

Had new client last week...referred by 2 very nice respectable clients that I have had for years and years.
Today one of them calls me and says "Have you seen today's paper? Ms. Smith was arrested for being part of a retail theft gang!"

I was waiting for her to give me some figures on her house cleaning jobs and expenses.

Don't think I want to sign that return! I'm sure IRS might check to see if she has some unreported income.

Linda, EA

That is just to funny. Sorry to laugh but I needed that.

Peachie

[oceanlovin'ea]

That's what I thought, Peachie. This is too funny.

Do I have a sign over me that says all loonies come here this year? This is only the middle of February....

Linda, EA

[JohnH]

Remember the old lawyer's rule. If it becomes apparent that SOMEONE must go to jail, make certain that it's the client!

[oceanlovin'ea]

Love it!

I love that John H. I'm going to make sure it isn't me!

Linda, EA

[oceanlovin'ea]

She's out.

client is out of jail. Called and wanted to know when she could come and finish the return.
I had a client and told her I would call her back to set up time. Asked her if she had the information that she was going to get for me and she does.

I don't know what to do!!!!!! Water cooler time!

I am very scared to do the return, but I think I will print up some kind of engagement letter and have her sign it stating that the information she has given me is the total of the income she received during the year.

Should I ask her if she claimed the income from selling the stolen merchandise? Or the money she got from the man she was working for?

Tricky, tricky.

Linda, EA

[S T]

Not Likiing This Scenario

Linda, I don't like this scenario at all, but you will have to go with your "pit in the stomach" feelings. And for me, when i receive some of those feelings, I just back off.

Seems like you can just "bow out gracefully" and then she can go to one of the other "National Chains" not sure what your "excuse" would be - but I think I would be finding one! Ask for more information - too busy -- payment -----I am not sure. Can you call someone at one of the local Natl Chains and refer her???

Based on your original post and given that she was in the "news: I DON"T THINK SO!

I don't think you can charge enough to have the fees matter! If you decide to prepare the return, then yes t/p needs to document to your satisfaction, and an engagement letter outling same would b appropriate.

My 2 cents worth

Sandy

[kpangelinan]

client is out of jail. Called and wanted to know when she could come and finish the return.
I had a client and told her I would call her back to set up time. Asked her if she had the information that she was going to get for me and she does.

I don't know what to do!!!!!! Water cooler time!

I am very scared to do the return, but I think I will print up some kind of engagement letter and have her sign it stating that the information she has given me is the total of the income she received during the year.

Should I ask her if she claimed the income from selling the stolen merchandise? Or the money she got from the man she was working for?

Tricky, tricky.

Linda, EA

What are you afraid of? If you do our due diligence, prepare the return, then what's the problem? Even if they were audited, you've done nothing wrong.

[JohnH]

To each his own, but I wouldn't touch the return. No amount of due diligence will relieve you of the potential hassles for a reurn of this type. I'd just tell them that they may need to consult with their lawyer about preparing this past year's return. Even more so if there's a refund or EIC involved.