Client owes me $$

[Bees Knees]

I guess it is all relative. To me, I never do work or lend money that I can’t afford to lose. What I mean is, if the work is so much that I could not afford to not get paid, I wouldn’t start, without first getting paid.

I have had several over the years not pay. I maybe do one more year and bill them for both years. Then they get cut off. The guy who built my house hasn’t paid in two years. I did not send him an organizer this year. If he calls, he can pay me first. I paid him for the house years ago.

Another thing you could do, assuming you have written off getting paid, is send him a letter saying your forgive his debt. Then include a 1099-C.

Wait until the end of February before sending the 1096 and 1099-C to IRS. He might call and ask what the 1099-C is. You can respond by saying he will have to ask his new tax preparer. He might decide paying you has some value.

[sea-tax]

Ah Bees the 1099c option. It is my understanding based on a recent Western CPE seminar that I attended that by doing this the practitioner may have violated circ 230 and also disobeyed the 1099-c instructions. I for one would go the route of a debt collector before I would issue a 1099-c. The reason being that once I send the 1099-c if it was even allowed is me saying I give up, and my daddy didn't raise a quitter.

Also it may take a while and I may loose 30% but I will get more in the end that writing it off.

[Bees Knees]

Ah Bees the 1099c option. It is my understanding based on a recent Western CPE seminar that I attended that by doing this the practitioner may have violated circ 230 and also disobeyed the 1099-c instructions.

1099-C instructions:

Who Must File
File Form 1099-C if you are:
1. A financial institution described in section 581 or 591(a)
(such as a domestic bank, trust company, building and loan or
savings and loan association).
2. A credit union.
3. A federal government agency including:
a. A department,
b. An agency,
c. A court or court administrative office, or
d. An instrumentality in the executive, judicial, or legislative branch of the government, including government corporations.
4. Any of the following, its successor, or subunit of one of
the following:
a. Federal Deposit Insurance Corporation,
b. Resolution Trust Corporation,
c. National Credit Union Administration,
d. Any military department,
e. U.S. Postal Service, or
f. Postal Rate Commission.
5. A corporation that is a subsidiary of a financial institution
or credit union, but only if, because of your affiliation, you are
subject to supervision and examination by a federal or state
regulatory agency.
6. Any organization whose significant trade or business is
the lending of money, such as a finance company or credit card
company (whether or not affiliated with a financial institution).
The lending of money is a significant trade or business if money
is lent on a regular and continuing basis. Regulations section
1.6050P-2(b) lists three safe harbors under which reporting may
not be required for the current year. See Safe harbor rules
below.

If IRS sqwaks, I'll just say that per Congress, tax preparers are now officially a federal government agency as we are required to squeel on all taxpayers who take a position that has less than a 50% chance of making it through an audit.

Tax professionals do more to administer and enforce tax laws in this country than any official government agency ever will or ever has done.

[sea-tax]

1099-C instructions:



If IRS sqwaks, I'll just say that per Congress, tax preparers are now officially a federal government agency as we are required to squeel on all taxpayers who take a position that has less than a 50% chance of making it through an audit.

Tax professionals do more to administer and enforce tax laws in this country than any official government agency ever will or ever has done.

Well Bees good luck with that argument. Personally I don't think it will hold up to get the penalty abated but if you can do it I say more power to ya.

[questconsulting]

I have a similar situation. A client wants copies of past corp tax returns. These were provided when the taxes were done but the client cannot locate them.

The client wants me to provide new copies but owes me $500 for accounting services provided several months ago.

Can I ethically insist on this payment for amount due before providing the additional tax return copies$

[sea-tax]

I have a similar situation. A client wants copies of past corp tax returns. These were provided when the taxes were done but the client cannot locate them.

The client wants me to provide new copies but owes me $500 for accounting services provided several months ago.

Can I ethically insist on this payment for amount due before providing the additional tax return copies$

You want the ethical answer or the legal answer?

Legally you can ask someone for just about anything. Personally I would tell the client that he is more than welcome to get a copy of the return which I already provided and that it will cost $500 dollars which is my copy charge. Of course this must be paid upfront.
This way you are not denying him access to the return. IF he chooses not to pay for the copy charge than that is his decision.

[Davc]

I will not contact an attorney, as I'm up to my eyeballs in attorneys right now.

I hope you're wearing a bio hazard suit!