I`m trying to buy a property and my lender asked for CPA letter. My accnt. sent them a letter stating that he did taxes for me for several years as EA. After the lender asked him for proof of his licence he is not reachable! He doesn`t answer the phone nor e-mails. I feel that he either doesn`t have one or is expired. Besides that my loan is going to be rejected, I`m also in panic from IRS. What should I do? Can I sue him? What IRS would do to me or him in this case?
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Loan rejection
1. I doubt if the loan is being rejected because your return preparer isn't sending a copy of his license.Originally posted by Unregistered
2. Regarding to IRS, are you having problems with IRS? Maybe your return preparer is retired. Or, died.
On what grounds would you sue him?Jiggers, EA -
Let's see
Let's see--In the greatest market of debt in the history of the world, you can only borrow money if you prove that your tax guy is half-way legit, but he went to ground the week before the extension deadline. You want to sue him, why? So you can expose your whole financial situation in open court? Why don't you just work with your mortgage broker? I'm sure he's very "talented."Comment
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Ask the Loan Officer for his License
I've yet to see one of those guys who could understand a K-1 or Schedule E pg 2. I love it when they ask for the balance sheet for a Schedule C filer. I even had one insist on seeing Schedule E page 1. He had page 2 but thought I was hiding something from him. I sent him a blank page 1 and he was happy.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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It is a fact that a CPA and an EA are nowhere like-kind. Similarity ends with tax preparation and/or maybe knowledge of taxes. The financial institution was not asking for tax information. Why would you think an EA could provide the kind of letter assurance that of a CPA? The kind of information the financial institution was asking for can only be provided (by law in most states) from a CPA. The EA should not have responded to the request and you should have been turned down for lack of knowledge.Originally posted by UnregisteredComment
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What kind of information
>>The kind of information the financial institution was asking for<<
What kind of information was that? A lender might ask for an audited or certified P&L, but that wouldn't be described as "a CPA letter." What the bank wants is only the normal file needed to sell the loan into the secondary market. For loans that are based on property values instead of source documents like W-2's, a letter from a licensed tax preparer vaguely explaining the source and stability of income is enough.Comment
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Ea
I'm an EA and have issued such letters as a "Compiliation". I have never had a problem with any institution in 35 years of doing so. If a bank needed an "Audited" or "Reviewed" statement that is something different. My letterhead clearly defines my status and the verbage clearly denotes my limited ability in expressing the "statements of management" to Compilation format.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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You’re right about that. EA only have to have a high-school diploma, and pass a two-day test on taxes.It is a fact that a CPA and an EA are nowhere like-kind.
CPA in most states have to have a College degree, plus pass a examine in all areas of accounting, law and taxes.Comment
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What is an examine? How do you pass one?Originally posted by UnregisteredComment
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you can tell, I'm only the high-school graduate, haven't learn to spell yet.What is an examine? How do you pass one?
how about examination.Comment
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Originally posted by Unregistered
You also should use the word "an" instead of "a" before a word that begins with a vowel.
You pass an examination, not a examination.
Just a little tip from a dumb uneducated EA.Comment
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Bees Knees, you might be a dumb uneducated EA, but you’re smart. (Me or I) on the other hand, got credits from 8 difference Colleges and Universities, but still can’t read and write.Just a little tip from a dumb uneducated EAComment
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Of course it is. Somebody's trying to start an argument. It must be a slow news day.Originally posted by Bees Knees
Any CPA who is a practicing tax professional knows how dangerous it is to assert any type of assurance regarding financial statements that are not part of a certified audit. It's the number one reason for successful liability claims against CPAs. The CPA says they were only issuing a letter. The client says, no, it was part of an audit.
I thought all CPAs knew that basic premise.
Saying a "CPA letter" carries more weight than an EA letter is infering that CPA letter carries assurances. Not so unless it's part of a certified audit.Comment
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Taxfun
Our firm (a CPA firm) receives bunches of those requests. We have a very tough letter based on a model from CAMICO, our E&O provider. Lenders do not like our letter, but we are not going to assume any responsibility for a decision that is totally theirs. We furnish copies of tax returns, but no assurance of the figures in them, as the client furnishes those.Comment
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