Outlandish medical expenses -- followup and ethical issue

[appelman]

When I parted company with the lady who wanted to deduct Tai Chi and swimming expenses, I returned her documents, along with a conservative bill for time spent. I didn't really expect to hear from her again, but I was a bit surprised at the response I did receive. She asked to see "the work I did," as she could probably use it to prepare her own return. I presume that what she wants is a draft return that she can transcribe and modify to be the way she wants it. It seems to me that it would be unethical for me to do this at any price. Even though I would not sign off on her return, I don't think I can avoid responsibility for providing someone with the tools to prepare what I strongly suspect would be an improper return. Am I right?

[erchess]

work product

I do not believe that you can give her anything that would help her file an incorrect much less fraudulent return. I do believe that before you can collect your fee or keep it in the face of a challenge you need some kind of contemporaneous record of the time you put in.

[Bonnie]

Think I would forget the fee and be glad she was gone. I had new customer couple weeks ago who after 2 visits he called and wanted to pick up paperwork for a second opinion, I could hardly wait for him to come get it and the only payment I wanted was the relief that he was gone and I didn't have to deal with him any more. First visit appointment was at 10, when 11:15 came and I hadn't heard from him I called to see if he still planned to come. He said he couldn't find his tax papers and had just then located them and could he come now. My answer, No, I have other appointments we can reschedule. Second appointment, he shows up late, has lots of documents including teenage daughter's W-2 that he thinks belongs to his wife. But no W-2 for himself or wife. I even offer to let him use my computer to print his W-2. He tries but doesn't know password to get into it. By end of this meeting, I knew I wished I had never met him. So when he wanted to pick up papers I was more than willing. Oh, yes, I had prepared the return. Reason refund went from 6000+ to about 900. I even showed him why, one less dependent. Education credits of 2000 in 2011, Retirement Savers Credit in 2011 that they didn't qualify for this year, and higher income so no EIC. So yes, I did work on his return. One's like this I just take the loss and move on. Doesn't happen often.

[taxea]

When I parted company with the lady who wanted to deduct Tai Chi and swimming expenses, I returned her documents, along with a conservative bill for time spent. I didn't really expect to hear from her again, but I was a bit surprised at the response I did receive. She asked to see "the work I did," as she could probably use it to prepare her own return. I presume that what she wants is a draft return that she can transcribe and modify to be the way she wants it. It seems to me that it would be unethical for me to do this at any price. Even though I would not sign off on her return, I don't think I can avoid responsibility for providing someone with the tools to prepare what I strongly suspect would be an improper return. Am I right?

First as her to detail what she actually wants and why she would need it. Tell her that the fee was for setting up her office file, review and research of the docs she gave to you and the time you spent on her issues. You have returned her documents, as required by the irs. The balance of anything you may have is work product which you are not required to provide to her. Tell her that if you provided her with anything more you would have to charge her for a completed return. Then tell her that you deleted any return you may have started because is not your client. Did she pay you the fee? I certainly would not waive it. It is for time you spent not for prep of a return.

[taxea]

Think I would forget the fee and be glad she was gone. I had new customer couple weeks ago who after 2 visits he called and wanted to pick up paperwork for a second opinion, I could hardly wait for him to come get it and the only payment I wanted was the relief that he was gone and I didn't have to deal with him any more. First visit appointment was at 10, when 11:15 came and I hadn't heard from him I called to see if he still planned to come. He said he couldn't find his tax papers and had just then located them and could he come now. My answer, No, I have other appointments we can reschedule. Second appointment, he shows up late, has lots of documents including teenage daughter's W-2 that he thinks belongs to his wife. But no W-2 for himself or wife. I even offer to let him use my computer to print his W-2. He tries but doesn't know password to get into it. By end of this meeting, I knew I wished I had never met him. So when he wanted to pick up papers I was more than willing. Oh, yes, I had prepared the return. Reason refund went from 6000+ to about 900. I even showed him why, one less dependent. Education credits of 2000 in 2011, Retirement Savers Credit in 2011 that they didn't qualify for this year, and higher income so no EIC. So yes, I did work on his return. One's like this I just take the loss and move on. Doesn't happen often.

you have a responsibility to yourself to get paid for your time.

[ChEAr$]

Very simply the "work" you did was consulting before preparing any return, hence there's no draft to give her.

and if she never pays your conservative bill, forget about it.

[JohnH]

How much could you have earned by doing productive work while you were thinking about this, posting questions, and conversing with this useless client? How much might you be able to earn if you have no more contact with her and focus on productive work? I'd tell her I've given her all she's going to get, remind her of the bill, and move on. If she pays you fine. If she doesn't pay, forget about it. You probably won't get paid without investing a lot more time in the legal process. Unless you just like the ego boost you might get by wasting more of your valuable time obsessing over the value of your time.

[Snaggletooth]

No Ethical Issue

I realize I am in the minority here, but I see no breach of ethical responsibility in providing her various calculations that you had reviewed with her, if this is what she wishes. Borrowing a trite phrase from the National Rifle Association - NUMBERS don't file fraudulent returns, PEOPLE do.
If "your work" includes partially completed Sch A, partially completed 1040, i.e. giving her a road map upon which to file line items for ridiculous numbers, then you might be crossing the line.

Next question might be "What if she stops by to get these numbers and refuses to pay because the numbers are not in the format she desires?" If that happens, just take your loss and usher her to the door and quit wasting time. My experience is for someone wanting to cheat on their taxes, they will cheat on paying their neighbor too. I'm very much like Bonnie when dealing with some of these folks, no reasonable billing for money will be worth the disarray and frustration they bring to your office.

[taxxcpa]

Collecting a fee in such a situation would not be worth the hassle, and, in any case, it is unlikely that it would ever be paid.
Of course, you want to get paid for your time, but in a few rare cases, you are going to have deadbeats or people who will only pay you if you will prepare a fraudulent return. It is almost worth paying them to go away than it is to have any further dealings with them.

I would not provide anything--just return their documents and tell them that you either do the entire return for your usual fee or you provide nothing but the papers they brought.

Once I had a return all ready to file back when we had to pay a fee to Nelco for e-filing. When I added an e-filing fee, the client claimed "that is highway robbery." I pulled off her W-2, handed it and other information she had given me and was glad to see her go.

[Burke]

How's this for kicks? Executor of estate has already paid me to do return so they could close estate by 12/31. I have yet to receive paperwork to complete. Four bene's, all of whom can't file 2012 until they get the K-1's. There is going to be pass-through income. Whatcha wanna bet they already have? Last email said he was sending 2/14. Didn't want to pay me to do accounting, so his wife did it, and it got sent back by the court to do over since it was such a mess.