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Conflict of interest

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    By definition, "conflict of interest" will not exist if all partners or shareholders agree on everything. By saying it's not a conflict of interest, what you're really saying is that there's never been a dispute among partners or shareholders as to choices and decisions made in tax treatment of entity items.

    If everything goes swimmingly all the time, that's great. But things don't always go swimmingly. You can bet that if there's a disagreement among business owners as to treatment of tax items, that conflict of interest you didn't think existed will land ugly on your desk and everyone will be looking at you for a solution.

    I do partnerships and S corps and also the partner and shareholder's individual returns. There's a practicality issue here as well, and it is much more efficient to have all the stuff in front of you. However, I discuss the situation with each individual and make sure that they all are O.K. with the arrangement, and tell them that if there's a conflict all bets are off.

    You can't avoid getting close to some perilous situations in this business. You just have to recognize the risks and be very, very careful. If you go along your merry way thinking there's no possibility for a big problem down the road, you're setting yourself up.

    Same with divorced taxpayers. I'll do both their returns on the condition that they agree 100% on everything. I've done both parties in a divorce situation exactly once in my career. I can't think of a more dangerous place to go than in between a an angry divorced couple holding both their tax returns. Why? Because they tell you everything's amiable and you believe them?