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[AccTaxMan]

Client is self-employed. When he came by this year, he gave me a written list of all the annual expenses. But the annual income is not there. I asked him about it. He said he forgot to bring the information but will call to tell me on the phone later.

Since I will not have any written document to prove that he is the one who gives me the figure in this way, I am very worried someone will accuse me of making up the number for him down the road. So what I plan to do is, after he call to tell me the figure, I will have my assistant to call him back to confirm the figure and document it. And then when he comes by to pick up the tax return, I will ask him to write down the number on a statement such as "the 2011 gross income from my xxxxx business is xxxxx".

Is it enough? What would you do?

[Burke]

Under normal circumstances, I would take his written document of what his gross income was. You could always ask for his business bank statements, but that more or less infers that you think he is fudging, especially if it has not been your normal practice. He signs off on the tax return and swears under penalties of perjury, that it is correct. So unless it sounds completely off the wall based on your knowledge of the client and his past income, not much else you can do, and I would not have a problem with it. Not quite sure what you meant by "the annual income is not that." Is not what?
Or did you mean "not there?"

[AccTaxMan]

Under normal circumstances, I would take his written document of what his gross income was. You could always ask for his business bank statements, but that more or less infers that you think he is fudging, especially if it has not been your normal practice. He signs off on the tax return and swears under penalties of perjury, that it is correct. So unless it sounds completely off the wall based on your knowledge of the client and his past income, not much else you can do, and I would not have a problem with it. Not quite sure what you meant by "the annual income is not that." Is not what?
Or did you mean "not there?"

Yes, it is a typo. I meant it is not "there".

[JohnH]

You could also ask him to email the figure to you. If he's reluctant to do that and insists on verbal communication only, then that's a reason for concern in my opinion. (unless he's one of the half dozen people in this country who don't use emai)

[ttbtaxes]

I'd want the information in an email or written by the client. Some things, such as property taxes or something similar, I would take a verbal.

No way with sales. If he gets audited, and the sales end up much higher, he will point the finger at you. "Hey, I gave Joe that number!"

I make every business client sign a letter of representation at the conclusion of the return each year. It applies whether it is a corporation, partnership, or Schedule C. It is three pages and in there I include various general representations and also add anything specific for that year. In this instance, I'd ask for the sales in an email and have them sign a letter of representation which spelled out that number.

[taxea]

I'd want the information in an email or written by the client. Some things, such as property taxes or something similar, I would take a verbal.

No way with sales. If he gets audited, and the sales end up much higher, he will point the finger at you. "Hey, I gave Joe that number!"

I make every business client sign a letter of representation at the conclusion of the return each year. It applies whether it is a corporation, partnership, or Schedule C. It is three pages and in there I include various general representations and also add anything specific for that year. In this instance, I'd ask for the sales in an email and have them sign a letter of representation which spelled out that number.

I have them sign an engagement letter before I start their return. I also provide worksheets and a checklist of documents I need before I start the return. This eliminates the problem you are having with your client.

[JG EA]

Client is self-employed. When he came by this year, he gave me a written list of all the annual expenses. But the annual income is not there....

If I had a nickel.......

[Gary2]

I am very worried someone will accuse me of making up the number for him down the road.

Who is this someone? The client? He has the chance to question you when you review the return with him and he signs it.

The IRS? You're not obligated to audit your client. Is there a reason for not believing the number? What exactly are you afraid the IRS would charge you with?

Someone else? Who?

[ChEAr$]

I have a client who...........

operates an S corporation for which I've been keeping books on a monthly basis, thus everything's ready for the tax return by january 31st except./////////........... except for his ending physical inventory.

I've advised him the past that IRS wants an inventory list to show how the total of , say,

$29,387 was arrived at.

Instead he will send me via email when pressed for the figure, something like "use 30,000,
or maybe "use 34,000".

Any wonder that I'm about to return all his records to him?

Sometimes you've just got to follow the biblical injunction and separate the wheat from the chaff.