Deatbeat client no undergoing background check

[Kram BergGold]

What I do

When I get this type of inquiry I either prepare the asked for document and mail it to my client with a note telling them that I was contacted to provide the following info but I can't do that without a specific form of release, and to make things easier for me, here is the info to pass onto the person requesting it and nwo no release is required.
Or, I send my client the release form and tell them who wants what and then wait for the release form to come back to me.

[JohnH]

But if it were not in code, anybody could do it.

[erchess]

Ooops

I found what I need with a google search. And it is not Form 7216 it is code section 7216. Sometimes I think tax information would be clearer if it were not in code :P

[erchess]

7216

Does anyone have any idea where I can get Form 7216 for this purpose? The versions in my software are for such times as I want to farm out the return to someone else or I want to sell them a bank product. There's not even one for they are applying for a loan and the bank wants returns.

[taxea]

Rita B, good info - often wondered if we could issue a 1099-C - we are as tax prof a trade/business, and we do extend "credit" or payment arrangements to some clients???

Hmmm?

Sandy

I would recommend you have the client sign a Promissory note at the time that you extend the "loan" for tax services. Then document attempts to obtain payment. The documents will help when you take client to court for fees due. After that I would file aa 1099C. I do this with personal loans as well and rental that are unpaid. I also recommend you not take a partial payment because that starts the process all over again.

[RitaB]

This may be

Okay, USIS is a federal contractor.

You could send a simple collection letter to the client, saying something like this:

- - -
We have received an inquiry from USIS, requesting information about you in connection with a background investigation. Please be advised that we are unable to respond to their inquiry until you sign and return the enclosed authorization, and satisfy your outstanding balance of $xxx.xx.
- - -

BMK

This may be a blessing disguise, erchess, he may just pay up!

I use ATX. I am ready for some blessings that are not in disguise.

[Koss]

Usis

Okay, USIS is a federal contractor. It's probably legitimate.

I still say you're not required to respond at all. And without knowing exactly how the release is worded, I can't say what I would do. You probably need to get a more specific 7216 release.

You could send a simple collection letter to the client, saying something like this:

- - -
We have received an inquiry from USIS, requesting information about you in connection with a background investigation. Please be advised that we are unable to respond to their inquiry until you sign and return the enclosed authorization, and satisfy your outstanding balance of $xxx.xx.
- - -


BMK

[erchess]

USIS not USIA

I got the name wrong it's USIS not USIA.

I did all of his returns at one time then did a call to the IRS then did the collection information statement then more calls and finally had an IA he felt he could live with. At that time I did the work and then billed. I have since learned to get the money up front from late filers. There used to be an ad with the tag live and learn and then get luvs. Well so far I don't need luvs but I have had to live and learn.

[ChEAr$]

AGree. I would simply ignored any voicemail ( I dont' use it anyway.) or telephone calls, without of course giving any reason.

But I would never make up a 1099C no matter how much a former client owed. I consider that unprofessional. Resorting to a commercial collection agency or even using small claims court is more efficient.

[tpnl]

Would not give any information

Our office would not give any information either. If the client wants you to release the information, then they would pay the bill. If they didn't pay, I would require the physical presence of the client before releasing any information (and I would only give them their original documents back if they didn't settle the bill). If I don't get paid, I am not a "paid preparer" so no copies of the return would be released.

We only have a very few LONG time clients that we will even file a return for if they don't pay their bill when the return is done.

[geekgirldany]

USIA no longer exists. It was merged into the State Department back in 1999 and its new name is Broadcasting Board of Governors.

Did you google the phone number? When I am in doubt about who is calling, I always google the number. I was getting several calls from the Better Business Bureau saying I had bad ratings. I did not and found out this was a telemarketing company even though Caller ID said Better Business Bureau.

Just does not sound right to me. I would just tell her that any clients must contact you first to sign a release and leave it at that. You can just ignore it also.

[S T]

Rita B, good info - often wondered if we could issue a 1099-C - we are as tax prof a trade/business, and we do extend "credit" or payment arrangements to some clients???

Hmmm?

Sandy

[RitaB]

Wait, what?

I did a little research, and I don't believe erchess is prohibited from issuing a 1099-C. I don't believe a 1099-Misc would be appropriate. I personally wouldn't do either.

http://www.unclefed.com/ForTaxProfs/irs-wd/1998/1998-020.pdf

I enjoyed this article, except when he said he was "to nice." I pictured a sign with an arrow pointing in the direction of "Nice." Then, he lost me with all that talk of collecting before you let your product out the door. Don't think I'll ever get there. Most people pay when they pick up. I can live with what I've lost by extending credit. It's not "to" much.

http://themotaxguy.com/blog/form-1099c-who-can-use-it/

[Bonnie]

Sounds fishy. Maybe they are trying to get information they are not authorized

[Gary]

Security Clearance

In order to get my security clearance, the FBI did background checks of people I knew and they did it in person. I don't know if things have changed in the last 25 years, but I would be suspect.