Requesting Info From Former Tax Preparer

[Snaggletooth]

Its YOUR dog, Charlie Brown

I'm sure all the opinions posted earlier about just what responsibility a preparer has to furnish information, paid or unpaid, legally or ethically, have made for good reading. At least I have enjoyed reading them, and actually know very little.

But all of this is beside the point. The client is the one with doggy-doo on the floor, and it's HIS dog. He is bringing the carpet to your office for you to clean. He should have prior copies, and if not, he should get them from the prior preparer. If he can't get them, what makes him think YOU can?

In all of the bantering in above posts about the obligations of the prior preparer, remember that to whatever extent he is responsible, he is MUCH more responsible to his former client than to the new preparer.

I hate losing customers too, and this rarely happens unless there is a change of venue in their lives -- moving, divorce, death, etc. I do provide copies of prior returns and depreciation schedules when requested. I charge $5 per year. Sometimes I get paid and sometimes I don't.

In fact, I am asked about copies much more often by existing clients who are making bank loans, and the bank wants to see the last three year's tax returns. Sometimes these returns show big losses for business and farms, and I have actually had clients come back and ask me to file amended returns to show more income so they could get a loan. Amazing how much revenue they just remembered...but that is a conversation for another time, I suppose.

[Jiggers]

Good post, Snaggletooth

You are correct, it is the client, or potential client's, problem to get the returns and prior information.

I have been there, done that, in trying to get prior information, only to find out that the prior bills have not been paid.

I even had a corporation that I picked up that was done by someone out of their home and could not provide any details about the depreciation calculation. I treatened IRS problems and still didn't get anything. The returns were a mess. She still does returns and a local bank was doing the recommending for her services. Whatever they were!

I do charge $0.75 per page for copies of tax returns. After the first charge, you will be surprised at how many times I don't get future requests!

Back to the last three weeks of tax season hell!

[Black Bart]

Snag/Jig

You're right about problem ownership and copy charges. I've noticed how frequently clients ask for another after I gave them one just last week. If I can't find mine, they often come up with theirs--it's amazing--they CAN walk in the bedroom, open a drawer, scratch around a bit, and pull it out. Thing is; they DON'T WANT TO GO TO THE TROUBLE (it takes 30 seconds out of their day and they'd much prefer that I "move mountains" to get a copy).

I've given freebies to existing clients in the past, but maybe I'll do like Snag--just start charging $5.00 (maybe ten) per copy for all comers. That'll probably cure a lot of the problems.

[erchess]

My understanding is

that in NC I can charge only if I announced at the time I did the return that there would be a charge for additional copies. Some firms seem to get by with having the announcement in the fine print of office signs but they obviously have to keep records of what signs they had up when. Everyone should have an engagement letter and it's simple enough to put that information in.

Under the latest law, can I mail or email a return copy in response to a telephone or email request provided that the name and address provided match what I have in my files? Can I fax where I am told provided the voice on the phone can provide client name address and ssn? I have done those things in response to client requests when I worked for my first firm, but lat was like five years ago and laws have changed.

[George Boutwell]

Content and validity of PoA

The other preparer is required by law to release any financial information in his possession and especially if required to complete the current year return. This is required because the taxpayer may not be able to be compliant with the tax laws without the documentation. This release is required even if he is owed money.

Profit

Unfortunately, no one is required by law to recognize a Power of Attorney. If Mary Doe calls me and says she has her father John's Power of Attorney, I am not going to shout "Woo Hoo" and spin around three times, clicking my heels. Let me see the Power of Attorney. Let me see if it covers disclosing tax records. Let me see what it says about when it expires, or how it can be revoked. Let me search my memory for recollections of John telling me, in better days, how he was afraid that his overbearing daughter Mary would try to take over his finances if his health failed. If there is no good reason not to help, I will. If I still have misgivings, I will tell Mary or her tax-practitioner friend that John will simply have to ask for the records himself. I may or may not tell them why I won't act otherwise.

[jainen]

Excellent post

>>Let me see what it says <<

Excellent post, George. The topic has come up a number of times in the forum, but you bring some important new perspective to it. The IRS has good reasons for saying they will only accept one particular form for p.o.a., and we should all take similar care.

What many people mean when they say they have power of attorney is that they get the trust (after he dies). Or it's a durable health directive, or nothing more than joint ownership or designation as beneficiary.

A power of attorney specifically authorizes certain representations, but it does not hand over control of anything. In fact, as a matter of law if the client becomes unable to handle things himself, the p.o.a. is void. The person signing is still your client and you still have a responsibility to him personally. You have no responsibility whatsoever to the person claiming power of attorney.