Ethical Question - TP gets married

[jrumbold]

Prior year client comes to appointment and announces that she got married last year and her new husband is not sharing any financial information and she is beginning to think she made a mistake. She says that husband told her he was getting his taxes done by his perparer who she says told him he could "file his own return since she didn't change her last name." I explain the rules of married persons and the options of MFJ or MFS. She leaves to discuss with husband.

She calls two weeks later to advise me that husband filed a joint return with his tax perparer and husband told her she didn't need to sign the return and neither did he. This would lead me to think that husband's tax preparer used the tax payer entered PIN method. Of course, wife should have been there to enter her own PIN. I advise client by email that either husband or tax preparer forged her e-signature on the return.

Now she is upset because husband had the refund deposited in his account and she is wondering if that is legal. She is also asking if I will review the joint tax return. Then client's daughter call and leaves me a message to please help her mother.

So, should I offer to review the joint tax return? I am thinking that there is not much I can advise her about it since I won't have any source documents other than her's. Should I report (or advise her to report) the proported misconduct of the other tax preparer?

[veritas]

This has ethical considerations

but it also has other considerations. If you review the return you will find things out the husband does not want you to know. He will likely be threatening. So you may have a safety issue. Also do not speak to family members or anyone else about the situation without your client's permission. Since this is going to end up in divorce court maybe let the attorney take the heat.

[sea-tax]

Jr like the Russian guy in the movie Rounders said "this one is no good for you". I would disengage from this client. All she can bring you is heart ache and trouble. It seems that it involves lots of work and risk for little to no benefit. Good luck though

[jainen]

pay for my services

>>this is going to end up in divorce court<<

I don't have much to say about that, but I see nothing wrong with reviewing any tax return, explaining what it says, and presenting options.

If it is a fraudulent return she can contact the taxing authorities and file MFS. My job is to help her with any of that, but of course she should discuss the legal implications with her attorney. There could well be a lot of work involved but I don't know why sea-tax thinks I might not "benefit," since I would expect a prior-year client to be willing to pay for my services.

[erchess]

As near as I can see,

this lady most likely needs three professional services. She needs a counselor who can help her keep her head together through all she has to go through. She needs an attorney who can represent her through the divorce proceedings, property settlement and so on. She needs someone who can represent her in front of the IRS and possibly in court. She may be able to get all the counseling she needs from clergy of her choice or she might get a referral from her clergy or her physician. The tax professional should be able to help her find a law firm. The tax professional might offer to assist her in dealing with the IRS or help her find a tax attorney who can work with her tax situation through at least the appellate courts. If the case reaches the Supreme Court, of course, she will most likely need another lawyer but her tax lawyer can help her find that individual.

I personally do not charge for reviewing a return or for helping people find a provider of services I cannot or do not choose to provide. He of course cannot even admit to the daughter that the mother is his client, but I see nothing wrong with listening without comment to whatever the daughter has to say so long as he does the same when someone calls but is mistaken about the person they are calling about being his client.

[jainen]

good chess playe

>>If the case reaches the Supreme Court<<

Wow! Like any good chess player, you are certainly thinking several moves ahead.

In the real world it doesn't hurt to look back a few steps. So far, all we know for sure is that a client had some miscommunication in her new filing situation.

[JCH]

I would steer clear of this one like it was the plague. It sounds like a time consuming mess that I wouldn't enter into this late in the tax season. Your client has bigger problems than you can handle, and should talk to an attorney.

[jrumbold]

Privacy issue

Thanks for all the replies.

I think there may be a privacy (ethical) issue if I look at the joint return, especially without husband's knowledge. Since wife is my client (ex-client), it may be a conflict of interest to review the husband's matters on the joint return.

Of course, if I did review anything, I would have to charge an hourly fee but I am not sure if it is worth it for just the money. Only compelling factor is that she was my client for several years. And, I am still dealing with an issue on her 2005 return where I checked the wrong box on the HH questionaire and the state (CA) is denying her HH status for that year. I think that issue is settled with a letter to CA but part of the joint state refund was held by CA probably because the letter and the refund crossed in the mail. I would have held up filing the joint return to wait for that determination but then neither client or husband asked my advice. Indeed, client wasn't aware that her husband was even filing the return.

Think I'll just back out.

[jainen]

not a conflict

>>it may be a conflict of interest to review the husband's matters on the joint return<<

No, it is not a conflict of interest. Each spouse has complete responsibility for a joint return.

How much was withheld? Once you resolve the 2005 issue (which is very simple for HH in California) the refund will be released in her own name! That will probably resolve everything very nicely.

Your client has been loyal to you, and I don't see any reason to cast her out. She's going to bring you new clients--count on it.

[WhiteOleander]

Looking at the MFJ return is not unethical. If the husband has "somehow" filed this return and included her on it, she can show it to whomever she wishes. She could publish it in the newspaper if she wanted to.

If she has been my client, I would do what I could to help her and guide her. From what you related, it appears to me, she needs an attorney. TAX attorney. A divorce attorney might not know how to handle the consequences she might be looking at if indeed the husband filed the joint return fraudulently.

I'm sure she would be thankful to have someone she has dealt with before tell her the best way to proceed at this point in her situation.

[GIMoe]

Privacy issue

I think there may be a privacy (ethical) issue if I look at the joint return, especially without husband's knowledge. Since wife is my client (ex-client), it may be a conflict of interest to review the husband's matters on the joint return.

Think I'll just back out.

No, it is not a conflict of interest. Each spouse has complete responsibility for a joint return.

Your client has been loyal to you, and I don't see any reason to cast her out. She's going to bring you new clients--count on it.

Looking at the MFJ return is not unethical.

If she has been my client, I would do what I could to help her and guide her.

I'm sure she would be thankful to have someone she has dealt with before tell her the best way to proceed at this point in her situation.

I'm gonna have to agree with Jainen & WhiteOleander, your client has every legal right to ask you to review her return if that is what she wants, with or without her husbands knowledge or approval.

And, in my humble opinion, unless you feel or are aware of something she has done that is illegal or unethical, it is your professional, ethical, and moral obligation to help her. After all, she is your client. You have history -- don't leave her hanging, man -- that's just not good MoJo. But, as I said, that is just my opinion.

[jrumbold]

Re: Privacy issue

Well, even before GIMoe replied I had emailed my client and told her I would review her return and help her in any way I could - at my hourly consulting rate, of course. I also told her to consult a tax attorney and domestic relations attorney for any legality issues. Also told her I could not speak to her daughter unless she (client) gave me written permission.

So, thanks to GIMoe and the others for putting me back on track to do what is in the best interest of the client. This is an awesome message board. So glad I found you folks. I am a loyal user of the Tax Book and this we keep me loyal. This is my second year in private practice after 8 years with the Blockheads. I specialize in rental real estate, small business, estates and multi-states. I am looking for referrals in the Irvine, CA (Orange County) area and I am pleased to give advice (mostly free) on areas of my speciality. I take pride in my integrity which is why I was so up tight about this issue. I especially like the idea that helping this lady may bring me referrals and even it it doesn't, I believe in the "goes round, comes round" theory.