Closing Practice

[Kurly]

If you were closing your tax practice after 42 years. How and when would you notify your clients? Would you ask the buyer to send notice to the clients he purchased? Would you send your clients a letter of resignation which would include the buyers information? Any and all comments will be appreciated.

Thanks Much

Kurly

[Uncle Sam]

Closing Practice

Both buyer and seller would simultaneously send out communications to the clients on their own respective letterheads informing them of the change. The letter would inform them of whose practice the newcomer will be replacing and how the change would effect them as a group, and what to expect upon the initial contact during the coming year.

[Maribeth]

The letters would also include a form that authorizes the buyer to receive the taxpayer's information/files from the seller. You cannot give the buyer the client files without that authorization.

Maribeth

[Kurly]

oncent Form

Where would I get such a concent form?

[Maribeth]

Where would I get such a concent form?

Just make it up. All it has to say is something like this: I (taxpayer's name) authorize Seller to transfer my tax files to Buyer.

Then the client signs and dates the form and you & the buyer keep the forms as part of your sales agreement.

Maribeth

[tpnl]

This is how we did it . . .

My office bought out a CPA that wanted to retire. She sent out letters that she was working with us and all information needed to be sent to us (our address). She worked part of tax season. Since she worked for us (even though it was a short while), she brought all her files with her. When she retired, she left us all her files. No need for documents signed by clients to have their files transfered.

The letter from her to her clients helped us retain some of her clients. That way her clients didn't feel like they needed to go somewhere else.

[Kram BergGold]

disagree on letter

The letter has to contain specific language to satisfy privacy concerns. Check the IRS website for information on this. I think that is where I found it.

[zeros]

Kurly-Selling Price?

How did you arrive at a selling price and terms? I'm thinking about the same thing.

[ChEAr$]

Last question first, zeroes. Selling price of a practice starts at 100% of previous 12 months' gross and adjusts up and down as buyer and seller negotiate. Plus FMV of any equipment changing hands.

Now, as for necessity of seller's clients' consent. I've read this before as it has been discussed on other boards, but now I'm wondering just what the authority for this stricture is. Is it part of circular 230 or otherwise in some kind of privacy regulations, e.g. Graham Blech Leakly. (???) legislation?

If part of circular 230, I shouldn't think it would it be binding on a tax pro's heir selling his practice?

I've recently reached an agreement in principal for another local EA to buy my practice from my daughter IF ... IF... (not when!) I'm not around. The sample agreement is among my papers along with a draft letter from me recommending the purchaser who is most qualified in my opinion to continue excellent work for my clients.

[Gary2]

The confidentiality rules are in section 7216. A quick read at http://edocket.access.gpo.gov/cfr_20...301.7216-2.htm shows that there is an exception for an incapacitated or deceased preparer, but I didn't see anything about the sale of a business.

[ChEAr$]

The confidentiality rules are in section 7216. A quick read at http://edocket.access.gpo.gov/cfr_20...301.7216-2.htm shows that there is an exception for an incapacitated or deceased preparer, but I didn't see anything about the sale of a business.

Well that cinches that. Thanks, Gary.

The only way my practice will be sold is IF i am "incapacitated."

[DMICPA]

Moving on

After 32 years I decided I wanted to move across the country and wanted to do it right away.

Wrote my clients a letter that I was moving and would no longer be their CPA.

On some clients I referred them to a CPA that was my size and similar client base.

On some clients I said go get another CPA and did not refer to anyone.

On some clients I retained as they were special and I was honored to do work for them.

I said that I would assist in the transistion.

When the client did choose the CPA, the CPA had the client send me an authorization to transfer the workpapers or anything that would make the transition easier.

Upon receiving the letter, I sent the CPA any needed records. This included the flash drive that contained the clients tax returns and history so the CPA could just plug it into his software and was ready to go.

Worked fine.