TP was cautioned, TP did it anyway & TP lied - Venting

[AZ-Tax]

Here we go again. TP was cautioned in an email from me prior to considering a premature retirement distribution, TP went ahead and did it and now TP lied to me verbally saying I suggested a 10% Fed withholding vs. the 30% I suggested in my email. Yes I forwarded the TP the email only for TP to tell me he didn't receive it but I also phoned TP at the same time I emailed going over the email. This is a 5 year client. No comments please on the suggested 30% W/H. Just venting and all other comments and/or your personal experiences are welcomed.

[ttbtaxes]

The ethics of yesteryear are gone. The day when a handshake was a solemn oath, and better than a contract, is long gone. That's really sad because I grew up during that time.

You have to cover yourself with written emails, written letters and more. That's why I get clients to sign letters of representation whenever there is a significant matter I'm relying upon the taxpayer's statements or to document my advice. It will only get worse.

[ATSMAN]

My 9am appointment also a long time client took out $25,000 from his 401k to buy a new home. In January I warned him verbally that he would be liable for a 10% additional penalty tax on top of his regular tax. Also made sure he signed the disclosure from his 401k that clearly spells out the pre-mature distribution penalty.

So he remembered my warning and we were ok.

I suggest you have your client review the copies of the disclosure that he had to sign for that withdrawal and there the pre-mature penalty should be clearly mentioned.

[Bees Knees]

This is a side issue and pet peeve of mine, but you did ask for all other comments, so I will vent as well. I don’t like the “lied to” accusation. A lie is a false statement to a person or group made by another person or group who knows it is not the whole truth, intentionally. By definition, a miss-understanding or lack of understanding cannot be defined as a lie.

It is entirely possible that our clients do not listen to or fully comprehend the tax explanations we give concerning a particular course of action. People tend to hear what they want to hear and ignore what they don’t want to hear. I have also learned through experience that tax accountants tend to have better math skills and poorer English skills, meaning we know what we know, but tend to be less able to communicate that knowledge to others.

Instead of accusing a client of lying (which in my mind is grounds for firing the client), why not view the experience as an opportunity to improve on our communication skills and the need for written documentation. If a client calls us with a proposed course of action with tax consequences, resist the urge to provide verbal answers over the phone. Listen carefully what the client is proposing to do, make notes, and then tell the client you don’t answer such questions over the phone. You will provide a written response (either through email or snail mail) and that further questions or discussions concerning the issue need to be in writing as well. If you hate the thought of having to compose a written explanation, simply copy and paste the explanations from IRS Pubs or TTB.

Anything you say verbally over the phone can be used out of context or miss-interpreted. That does not necessarily mean you or the client are lying to each other.

[luke]

disagree

Here we go again. TP was cautioned in an email from me prior to considering a premature retirement distribution, TP went ahead and did it and now TP lied to me verbally saying I suggested a 10% Fed withholding vs. the 30% I suggested in my email. Yes I forwarded the TP the email only for TP to tell me he didn't receive it but I also phoned TP at the same time I emailed going over the email. This is a 5 year client. No comments please on the suggested 30% W/H. Just venting and all other comments and/or your personal experiences are welcomed.

I have THE UTMOST respect for Bees and would NEVER disagree with him on factual tax issues!
However, When a taxpayer SAYS that YOU said one thing when in fact you did not AND denies that he got a follow-up phone call AND did not get an email - I think that rises above the level of a "misunderstanding"?
We ALL have dealt with these type of situations and I like to give everyone the benefit of the doubt BUT when it quacks like a duck and waddles like a duck............

[buzzardbreath]

Lying

In my part of the country (and everywhere else I've been), to be called a "liar" is among the strongest personifications, on a par with being a "thief" or perhaps even worse. In conversations that are growing heated, there is still a refrain from using the word, as you hear antecedents, such as "I believe you're mistaken" or "are you sure this happened" which imply a mistake of facts without invoking the ultimate insult of being called a liar. Calling someone a liar can result in a punch to the face.

I have to give credence to the possibility that people are non-communicated, unintentionally mistaken, have unfocused grasp, etc. But in any given chain of events, if one consistently spews forth misleading information, particularly if that person is the beneficiary of the content, you have to conclude that person is really a liar. You don't have to speak it or enter into an argument, but you should insulate yourself against the consequences of bad information.

Just as we should be forewarned about jumping to conclusions, we should also be firm enough in our own convictions to know the Devil when you see him. Without getting into a religious Bible-thumping filibuster, if you do believe the scriptures or even if you don't, they tell us that the real power of the Devil is the ability to deceive, and at a very sophisticated level -- able to deceive entire nations.

Anyone can tell the truth when its convenient, and do so with pride and pomp. But there are fewer people who will own up to the truth when it puts them in a bad light or results in negative consequences.

This is not intended to be a non-topic moral tirade, but it is what it is. This is appropriate to the way we do business, as we are often confronted to decide what is (or isn't) revenue, what is deductible etc. with no clear guidance from documentation, and NO information other than what we are told. To some degree, I am faced with such decisions nearly every day during tax season. Some situations are so unique that they could not have been fabricated, others are slickly contrived, and others are so inconsistent they belie the truth. And often, we just don't know. My position is to give the taxpayer the benefit of the doubt if there is no better information than his word. The cord snaps, however, with repeat circumstances and inconsistencies.

The moral turpitude becomes even worse when a customer tries to entice you to take an errant or fictitious position with regard to his(her) tax return, and then tells you he'll back you up if you get in trouble. How can you believe this person will "back you up" if he can't even tell the truth the first time, when it becomes his choice to go to jail or let YOU go to jail? What do you he will do?

There's one thing about people that is almost universal: "The more they change, the more they stay the same."

[S T]

Maybe in the OP it was a "poor choice" of words or description. We all know how Taxpayers hear what they want to hear.

With emails, letters, faxes, etc we would hope that the communication to the T/p was received. Now if the T/p decided to not read, process or overlook the communication ----- ??

I have always been taught, document, document, document!

Sandy

[Bees Knees]

I have THE UTMOST respect for Bees and would NEVER disagree with him on factual tax issues!
However, When a taxpayer SAYS that YOU said one thing when in fact you did not AND denies that he got a follow-up phone call AND did not get an email - I think that rises above the level of a "misunderstanding"?
We ALL have dealt with these type of situations and I like to give everyone the benefit of the doubt BUT when it quacks like a duck and waddles like a duck............

And I agree such a situation could in fact be the result of a client being a liar. In which case the appropriate thing to do is fire the client on the spot, as you can no longer trust anything he tells you concerning his tax return.

After all, you can't sign a tax return claiming everything is true to the best of your knowledge if in fact you know the client is a liar.