Our CPA misled us

[Uncle Sam]

CPA Mislead You

First of all, you haven't told us why there were tax estimates to be paid, if your husband was on a salary with withholding.
Second, you haven't told us if any facts were changed after the filing deadline with respect to your data - did you need to give him additional tax information AFTER 4/15 that impacted the return?
Third, although it's advisable to pay any taxes due with an extension, it's not required anymore.
As the prior poster mentioned - we're not here to give you advice when we don't know if we're dealing with all the relevant facts.

[BOB W]

"We submitted all of his financials to a CPA back in Feb/March. Come April, he called us and said that hubby was due a REFUND from the IRS and state. He said he would file an extension and get the paperwork done by August."

WOULD YOU please explain "Financials". Did you do the bookkeeping???????

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"Also, can we pay these taxes with a credit card?" YES

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[breckgirl5]

need clarification

Nobody can pass judgement in this situation because nobody was there listening the conversations.

I'm not sure I understand this answer, because I thought role of an accountant was to at the VERY least give you a rough idea if you owe or if you are due a refund. I would think this would be very easy to determine with some preliminary calculations.

By the way, the S Corp taxes were fine and were already paid (so he was not a year late)... it was his personal income taxes that ended up short.. and he was using PayChex to handle the payroll. My husband even double checked with him and said, "OK, are you SURE I will not owe on my personal taxes?"

And what about the penalties that he'll incur now, due to the late payment (no estimated payment was sent with the extension). Is it unfair for us to ask him to absorb some of these penalties?

I realize you were "not there," but the situation is not that complicated. He told hub he would be fine. My hub even called him back to make doubly sure.

I guess the essence of my question is this.... if a hired CPA tells a client that he/she does not owe taxes... and then it turns out the client DOES owe... who should be responsible for the penalties?

[Luis Mopeo]

Nobody can pass judgement in this situation because nobody was there listening the conversations.

With my clients, I'll often give them an educated guess about where they'll land when the return is complete because every one of them will ask. If I feel like I have a good handle on their situation, I'll tell them approximately where I think it will end up. I'll also say "This is just a guess, and things might change when the return is complete."

They always say "Oh, sure, I understand it's just a guess. I won't hold you to it."

Then if my guesstimate is wrong, they'll say "But you told me..."

Many tax professionals refuse to give out any preliminary figures for this very reason.

You weren't specific as to what "realtor with an S corp" means. If your husband was responsible for making sure the S corporation returns were properly filed, dropping '06 stuff off in February/March of '07 is about a year too late. There also may be payroll tax issues.

Again, nobody can say without having been involved with the conversations.

[breckgirl5]

Hello everyone,

I am beside myself with confusion/anger/depression right now and I need help.

For background, husband and I file separetly because he owes back taxes from many years ago. We keep our finances separate and our assets are all in my name.

Up until Q4 2006, my hubby was a realtor with an S Corp. At the end of the year, he exited real estate due to an underperforming market in our area.

We submitted all of his financials to a CPA back in Feb/March. Come April, he called us and said that hubby was due a REFUND from the IRS and state. He said he would file an extension and get the paperwork done by August.

We were naturally thrilled about the refund, and the money we were saving for taxes was then spent on a vacation!

Well, hubby went to pick up his tax forms from the accountant last week and -- low and behold -- he OWES about $2,500!!!!!!!!!!!!!!! (IRS and State combined.)

I am deeply puzzled by this. How could this guy miscalculate SO badly? On top of everythign else, I thought taxpayers were supposed to remit extimated payments with an extension form. Our accountant did not do this. Will hubby now be penalized for not sending $$ with the extension?

Also, can we pay these taxes with a credit card?

We are talking with the accountant tomorrow morning at 8am sharp. I want to have some opinions before then. Thanks in advance for any guidance you can give us. I'm in shock.