Releasing Information

[jainen]

my own work

>>It's part of the tax return<<

Well, gee, what's the sequence number?

The current year deduction is part of the tax return. The schedule is just a means to an end.

If the client gives me a dozen utility bills for Office in Home, the bills are his property, the total is part of the tax return, and my calculator tape is neither. If the client has an insurance settlement to report, my interview notes to determine the proper treatment belong to neither the IRS nor the client--they are my own records of my own work.

[Joe Btfsplk]

Depreciation schedule.

>>a

I will provide the originals or copies of client source documents. The depreciation schedule is NOT part of the tax return--it is my own internal workpaper and I don't release it.

I agree. The tax return does not require a complete depreciation schedule, only a Form 4562, which you should release IF you were paid for the return. Just because you have a depr. worksheet that your tax software used to get to the amount that goes on Form 4562 does NOT mean it is part of the return itself.

If you weren't paid, then all you need to give anyone is what the client brought to you.

[Bees Knees]

We are mixing up who we are agreeing with and who we disagree with. Some of you are saying you agree with someone, and then contradict what they just said.

IF the return was paid for by the client, then the calculations used to determine depreciation belong to the client (such as a depreciation schedule).

IF the return was not paid for by the client, then the calculations used to determine depreciation belong to the preparer (such as a depreciation schedule).

Show of hands. Who agrees?

Now, show of hands. Who disagrees?

[Black Bart]

John Kerry

We are mixing up who we are agreeing with and who we disagree with. Some of you are saying you agree with someone, and then contradict what they just said.

Flip-flopper. I thought at first you were saying (to Bob) to not give it to them. Then when jainen said the same, you disagreed. Consider yourself reprimanded.

What about one of your polls?

[Snaggletooth]

Let Him Know

Somewhere in this process, no one yet has brought up the spectre of what the new CPA would think if you simply let him know that your former client hasn't paid you.

If I encounter a new client and find out he hasn't paid the tax preparer from last year, the first thing I want to do is to withdraw. Often I reference the "guy across town" who is unscrupulous and takes away customers because he does anything the client wants him to do whether true or not. As much disdain as I have for the "guy across town", if I find out he hasn't been paid for the prior year I will drop this new client, or at least put him on a cash-up-front basis and TELL HIM WHY.

Sometimes there are good reasons for not paying last years' accountant. But I would expect to have this discussion early, probably in conjunction with reviewing the prior year return, and I can observe possible evidence as to whether there might be a problem. But these reasons are not common, and in general I won't accept such a new client.

For the "guest" who started this post: Do you know the new CPA? Often you will if he is in your same town. I'm good friends with most of them in my county and some of them in neighboring towns. Sometimes I get one of their clients and sometimes they get one of mine, and we don't get all torqued off about it. I would furnish the new CPA any information given to me by the client and in the process I would break the news to him about the non-payment.

Also, the situation described by Bob W is a common protocol observed by CPAs, and is overwhelmingly geared to certain information conducive to an audit or review. This may simply be protocol among CPAs or it may be procedural on their part as it is not in the best interest of the AICPA to hinder an audit and addition not very professional to withhold under those circumstances. I'm not sure whether this is statutory law, and whether it extends to tax practitioners.

[Bees Knees]

What about one of your polls?

I was informed that my polls are not as humorous as your polls. I'll let you do the honors on this one.

[Joe Btfsplk]

Information used for Depr schedule

edit: you may not be required to actually give the depreciation schedule, but you are required to give the information from the schedule that was used in calculating the tax return. I don't know how you would do that without just giving a copy of the schedule or it would take more unpaid work on your part.

If you had been doing his taxes for several years, you might be obligated to give them the depr schedule, but it was a one-shot client who didn't pay you, then you would only need to give what the client brought you that you used to prepare the depr schedule--possibly the prior year return. But if you gave the prior year return back to the one-shot client, then the other accountant should get it from the client.

If it were me, I would just give the other accountant the information rather than to waste my time quibbling about it.

[JG EA]

Give all the depreciation forms you got paid for.

I would give the previous years' depreciation if paid for. I would not give the current years' depreciation schedule or any other workpapers if the return is not paid.

I would give back all source documents, I would not give a copy of the unpaid tax return.

The exception to current workpapers would be if I really, really never wanted to have to think about or hear from that person again.
(Just like sometimes it is a good thing to loan certain people money you never want to see again.)

[Black Bart]

I agree with this quote

If the client gives me a dozen utility bills for Office in Home, the bills are his property, the total is part of the tax return, and my calculator tape is neither...my interview notes...are my own records of my own work.

The hang-up seems to be that while many (including me) feel the depreciation schedule is our property and not the client's, the rule says we have to give them enough information to do the tax return.

Why not let the CPA sort it out -- just hand over the documents you used, whether orginal invoices, written list, set of books, or whatever? We dug through all the junk; let them do the same -- giving info necessary for a return doesn't require a nicely-bundled summary such as a depreciation schedule. If depreciable items were given to you verbally, say you have no written record and to ask the client.

Re: prior years' purchases info on the schedule -- I include a depreciation schedule with my taxpayer copies (some don't) and I've previously furnished that, so my obligation on those items is fulfilled. I don't think I'm required to continue giving him copies forever (they could ask a hundred times). If they've lost the previous year, they can request another from IRS.

[Black Bart]

Investing wisely

The exception...like sometimes it is a good thing to loan certain people money you never want to see again.

Over 30 years ago I loaned a gun to a chronic deadbeat in-law. He sold it for $25 and has avoided me ever since. To this day, that remains one of the best "investments" I ever made.

[Black Bart]

Funnier-than-thou, eh?

I was informed that my polls are not as humorous as your polls. I'll let you do the honors on this one.

Well, don't take it personally. It's not like they said your wife's ugly or anything. But still, I like yours better because you follow them up with some in-depth analysis of the responses and we learn more instead of just being entertained. So...pretty please with sugar.

If you're still miffed, maybe we can get Veritas or Dennis to go for it. Somehow, I'm just not in the mood to get into it now.

[Jiggers]

Client Information

I am an EA. I would give the client back all of his papers and documents that he gave me to prepare the current year return, that is not complete. If I had done some substantive work, like sorting through the mess and organizing it, I would ask for payment. If the client is refusing to pay, then I would not give him anything I had done. I would undo the organizing!

As far as prior year depreciation schedules and my work papers. I give the client a copy of the return and all his original documents back. My work papers are my copies and notes regarding his return. I do not give those back. I am not required, by law, to keep any work papers, just be able to explain how I did the return, if required. I keep these to "refresh" my memory!

If the client/new CPA wants copies of prior year returns that have been paid for, $0.75/page before I release them. No copies of any prior year returns that have not been paid for. I had one of those this tax season and refused to provide anything since I wasn't paid.

Several years ago, I got stiffed by a client and his partnership. Guess what, the partnership got audited 2 years later. He wanted copies of my files as he had thrown all his bank statements and documents away. I said that when he paid his bill, plus my fee for copying these, he could have them. I also asked for a retainer in advance to rep him during the audit. He refused. He went elsewhere. I never did give up any documents and I always wonder what happened during the audit.

[BOB W]

Lawyer

I once turned over to a lawyer a client that owed me $3,500. We got a judgment and nothing else. 5 years later I get a call from my lawyer that this deadbeat wants to buy a house and wants to settle with me. Sure I said, but the lowest I would go is $3,200. I collected my $2,133 (lawyer got a third) and was very happy that I made the ex-client squirm.

[OldJack]

As far as prior year depreciation schedules and my work papers. I give the client a copy of the return and all his original documents back.

I make copies of "all" documents given me and return to the client all original documents with a copy of the tax return at completion. I never keep anything belonging to the client.

As a practice policy, I attach a (software printed) copy of the detail depreciation schedule to the client's copy and the IRS's copy of all type paper tax returns (1120,1065,1040,Sch-C,Sch-E, Sch-F, etc) even though I know the IRS does not want the copy. I have done this for more than 35 years. I do not efile as my clients are business clients that don't need or care about efile.

I expect this depreciation practice has resulted in my not having many audits that I might have had otherwise for several reason, one which shows that the taxpayer is doing proper accounting/bookkeeping. This practice also avoids the request for such information from an ex-client's new tax preparer.

[sea-tax]

Over 30 years ago I loaned a gun to a chronic deadbeat in-law. He sold it for $25 and has avoided me ever since. To this day, that remains one of the best "investments" I ever made.

bb this reminds me of a movie called the "A Bronx Tale" staring robert dinero. In the movie his kid loans a friend 20 bucks and the friend keeps avoiding the son.So the son trys to beat the friend up but the local mafia boss tells him your better of letting him keep the money now you don't have to deal with him again , you got off lucky because you never have to talk to him again or something to that effect. Great movie I think Robert Dinero or how ever you spell it directed and starred in it.