Refinancing home mortgage loan

[NSNM]

In the past two years few of my tax clients refinanced or consolidated their home mortgage loans for a lower better rate.

Lenders have asked borrowers to provide a letter from the tax preparer that the preparer prepared taxpayers' returns, and how long the preparer knows the taxpayers. If the borrower is a Sch. C filer or K-1 receiver, they want preparer to comment on how long the taxpayer has been doing business, going concern issues, etc.

Has any of readers issued such letters? What is the potential trouble for the tax preparer from the lender institutions?

Why are the lenders ask the letter if most of those information can be gathered directly from the filed tax returns signed by the preparer. In many cases I don't keep in contact with taxpayers until the next filing season. Why lenders cannot rely upon the tax returns itself without involving the preparer. Any comments or opinions.

[Davc]

It's an attempt to cover their butt with yours. I will state that I prepared returns for John Doe from the information provided to me for the years XXXX-XXXXX and he reported SE income/(loss) in each of those years. I will not address other issues such as going concern or future prospects.

[ttbtaxes]

Comfort letter

The lender is asking for what's known as a comfort letter. I won't do one, under any circumstance, no matter how benign the request may seem. If it means I lose a client over it then bye bye client. You may be dipping your toe in a pool that will unknowingly pull you in entirely at some future date.

There is an excellent article about this in the Journal of Accountancy. To access the article go to AICPA.org then type in "CPA comfort" in the search box.

[taxea]

In the past two years few of my tax clients refinanced or consolidated their home mortgage loans for a lower better rate.

Lenders have asked borrowers to provide a letter from the tax preparer that the preparer prepared taxpayers' returns, and how long the preparer knows the taxpayers. If the borrower is a Sch. C filer or K-1 receiver, they want preparer to comment on how long the taxpayer has been doing business, going concern issues, etc.

Has any of readers issued such letters? What is the potential trouble for the tax preparer from the lender institutions?

Why are the lenders ask the letter if most of those information can be gathered directly from the filed tax returns signed by the preparer. In many cases I don't keep in contact with taxpayers until the next filing season. Why lenders cannot rely upon the tax returns itself without involving the preparer. Any comments or opinions.

This has been asked and answered over and over...if you can't find the posts here google "cpa letters" or accountant letters.

[S T]

Helping Hand

I always find it helpful if we don't want to answer the thread - refrain or maybe give the OP a - thread to review from prior posts, or other information.

so here goes on one of the "Threads" http://www.thetaxbook.com/forums/sho...gage+letters[/

You can do a "Search this Forum" and find other posts - sometimes takes a little effort in case you don't enter just the right "group of words"

There are more threads on TB that are older, as we seem to have this same concern and discussion each year.

NSNM is new to the TB Board, and we welcome and look forward to the participation.

Sandy

[NSNM]

Comfort letter

Thank you Davc, ttbtaxes, and taxea for providing useful suggestions and referenced sources. That article in the Journal of Accountancy covered all important aspect of "comfort letter". Great. And my heartfelt thanks to Sandy for encouraging words and guiding to a very informative past thread. That was an excellent thread. Thanks again to everyone.